^$&W 


Messrs.  JOHN  Q.  LANE, 


AND 


i 


SILAS  W.  PETT1T, 

mOWINGt  IRE  ILLEGALITY  AND 
i  PJMINAI  CuXsPIEA  CY 


-oF   THE- 


ANTHRACITE  COAL  I 

MONOPOLY, 

BEFORE  THE  INVESTIGATING  COMMITTEE 

OF   THE 

PENNSYLVANIA  LEGISLATURE, 


JULY  28th— Slst  18: 


\ 

PHILADELPHIA: 
A.  T.  ZEISING  A  CO..  PES.,  s.  j;   COR,  FOURTH 

1875. 


IB  CIIE-^XUT  STREETS, 


£5M 


jt£»*] 


THE   UNIVERSITY 

OF   ILLINOIS 

LIBRARY 


EGO? 


ARGUMENT 


JOHN  Q.  LANE,  Esq.. 


OF   PHILADELPHIA, 


BEFORE    THE 


Joint  Committee  of  the  Legislature  of  Pennsylvania,  ap- 
pointed to  inquire  into  the  affairs  oj  the  Philadelphia 
and  Heading  Coal  and  Iron  Company  and  the 
Philadelphia  and  Reading  Pail  road  Com- 
pany, on  July  28th,  1875, 

IN    OPPOSITION   TO  THE 

ANTHRACITE  COAL  MONOPOLY. 

SPECIALLY    REPORTED    BY 

JOSEPH   I.  GILBERT. 


33?,  X 


c 
0° 


Mr.  Chairman  and  Gentlemen  op  the  Committee: — When 
the  learned  counsel  for  the  Philadelphia  and  Reading  Coal  and  Iron 
Company,  and  the  Philadelphia  and  Reading  Railroad  Company,  opened 
the  case  of  the  defence,  he  intimated  that  the  charges  against  those 
companies  of  illegality  and  unconstitutionality  had  been  abandoned.  I 
2  have  no  doubt,  gentlemen,  that  as  you  had  heard  all  the  testimony 
5  submitted  by  us  you  were  surprised,  and  we  frankly  admit  that  we  were 
astonished  at  this  intimation.  So  far  from  withdrawing  any  of  the 
charges  made  against  these  two  companies  in  the  joint  resolution  of 
the  Legislature  of  Pennsylvania,  we  are  here  to  reiterate   the  charges 

J  a  nd,  T  think,  to  convince  you,  gentlemen,  that  these  two  companies 
have  not  only  been  mining  and  selling  coal  without  any  lawful  authority 
-y  but,  further,  that,  if  they  did  have  lawful  authority  to  mine  and  sell, 
~~~  they  have    been    exercising    it   in    a  way  that  is    not  only  unlawful 
but  criminal. 

To  come  to  the  question  of  a  WANT  OF  LAWFUL  POWER  to  do 

/  what  they  have  been  doing,  it  will  be  necessary  for  us  first  to  ascertain 

^   what  power  it  is  that  they  do  possess  and,  after  that,  to  see  whether 

^  they  are  exercising  or  attempting  to  exercise  any  power  not  given  to 

J  them  by  the  law,  by  their  charter,  or  by  necessary  implication.     For  the 
purposes  of  this  investigation,  it  will  not  be  necessary  for  us  to  go  into 
any  critical  analysis  of  the  powers  of  the  Philadelphia  and  Reading 
_  Railroad    Company.     That   corporation    we    know   to   be    a    common 
~- carrier  and   neither  in  its  charter,  the  supplements  thereto,  nor  the 
^  general  laws  of  the  commonwealth  is  the  power  anywhere  given  to  the 
_2  railroad  company  to  mine  or  sell  coal.     All  the  power  for  that  purpose 
that  this  railroad  company  is  assumed  to  possess  is  contained  in  a  pro- 
i  vision  in  the  charter  of  the  Coal  and  Iron  Company.      I  repeat  that 
you    may  search  it  all  through  and   nowhere  will   you  find    in   the 
charter  of  the  railroad  company  any  power  whatever  to  own  coal  lands 
or  to  mine  or  sell  coal:  the  company  is  simply  a  common  carrier  with 
v  authority   to   own   only  such  real  estate  as  may  be  necessary  for  its 
laisiness    as  a  common   carrier.     The  charter  of  the   Coal   and   Iron 
C  Company,    however,    contains  this   clause,   "and  for  any  railroad   or 
L/  mining  company  existing  under  the  laws  of  this  state  to  subscribe  for 
-^  or  purchase  the  stock  or  to  purchase  or  guarantee  the  bonds  of  the 
company  hereby  incorporated." 

373445 


4 

It  is  these  few  words  that  empower  the  railroad  company,  if  indeed 
it  has  the  power  at  all,  to  do  all  the  mischief  of  which  we  complain. 
Aside  from  these  few  words,  take  them  out  of  the  charter,  and  the 
railroad  would  not  pretend  to  have  any  power  such  as  is  here  claimed. 
We  come  therefore  at  once  to  an  investigation  of  this  charter  of  the 
Coal  and  Iron  Company.  It  is  entitled  "An  act  to  incorporate  the 
Laurel  Run  Improvement  Company."  I  ask  you,  gentlemen,  to 
observe  that  there  is  but  one  subject  in  the  title  of  this  charter ;  that 
which  I  have  just  read  being  the  entire  title.  The  act  goes  on  and 
provides,  as  is  customary  in  all  such  charters,  for  the  incorporation  of 
this  company  and,  in  the  third  section,  enumerates  the  powers  given  to 
the  company:  "  The  said  corporation  shall  have  power  to  purchase,  sell, 
transport  and  mine  coal  and  to  mine  and  manufacture  iron,  and  for 
this  purpose  the  said  company  shall  have  power  to  acquire  from  time 
to  time  by  purchase,  lease  or  otherwise,  such  lands  as  they  may  deem 
expedient,  and  may  lease,  sell,  mortgage  or  otherwise  dispose  of  such 
lands  or  any  rights,  easements  or  privileges  therein,  and  may  con- 
struct all  necessary  buildings  and  fixtures  necessary  for  the  business  of 
mining  and  for  preparing  coal  for  market,  mining  and  manufacturing 
iron  and  the  accommodation  of  persons  engaged  in  their  employment 
in  the  said  business." 

Further  on,  it  provides:  "And  it  shall  be  lawful  for  the  President 
and  Directors  of  said  company  to  subscribe  for  and  purchase  the  lands 
or  stock  of  any  other  incorporated  company  in  the  state  of  Pennsylvania." 

Now,  gentlemen,  as  we  understand  the  English  language  and  as  we 
understand  the  law,  what  I  have  read  to  you  constitutes  one  subject. 
It  incorporates  a  company  and  it  gives  to  this  company  certain  powers 
and  certain  privileges — sufficiently  numerous,  most  assuredly.  Then 
follows  this  clause :  "  and  for  any  railroad  or  mining  company  existing 
under  the  laws  of  this  state  to  subscribe  for  or  purchase  the  stock,  or 
to  purchase  or  guarantee  the  bonds  of  the  company  hereby  incorporated." 

We  say  that  this  is  another  and  a  distinct  subject,  as  compared  with 
the  one  already  contained  in  the  Act.  One  of  the  subjects  provides 
for  the  incorporation  of  a  company  and  for  giving  to  it  the  powers 
that  the  law  intends  it  shall  have :  the  other  subject  provides  with 
ecpial  distinctness  for  the  increasing  or  extending  of  the  powers  or 
franchise  of  all  the  other  corporations  in  Pennsylvania.  Without  this 
provision,  these  corporations  had  no  such  power :  there  is  no  statute 
providing  that  they  shall  have    such    power.     On  the  contrary,  the 


prior  Act  of  April  15th,  1869,  provides  that  the  power  given  in  that 
act  to  corporations  to  guarantee  the  bonds  and  purchase  the  stock  of 
mining  companies  shall  not  extend  to  Schuylkill  County.  Therefore 
I  say  to  you,  gentlemen,  that  in  VIOLATION  OF  THE  ACT  OF 
ASSEMBLY  of  1869,  this  company  has  been  mining  coal  in  Schuyl- 
kill County  and  selling  it  all  over  the  country. 

Previous  to  1864,  as  is  known  to  those  of  you,  gentlemen,  who  have 
occupied  seats  in  the  Legislature  of  Pennsylvania  for  many  years,  the 
custom  of  passing  what  were  known  as  "  omnibus  bills  "  or  bills  con- 
taining a  variety  of  subjects  not  expressed  in  the  titles  prevailed  to  an 
alarming  extent.  In  1864,  the  following  amendment  to  the  Constitu- 
tion was  adopted : 

"  No  bill  shall  be  passed  by  the  legislature  containing  more  than 
one  subject,  which  shall  be  clearly  expressed  in  the  title,  except  appro- 
priation bills." 

If,  therefore,  the  incorporation  of  the  Laurel  Run  Improvement 
Company  and  the  granting  to  it  such  powers  as  are  necessary  is  a  sub- 
ject distinct  from  that  of  the  extending  and  increasing  of  the  powers 
of  every  other  corporation  under  the  Commonwealth  of  Pennsylvania, 
it  must  appear  to  you,  as  it  does  to  us  clearly,  that  as  this  charter  con- 
tains two  subjects,  it  was  passed  in  direct  VIOLATION  OF  THE 
CONSTITUTIONAL  PROHIBITION.  The  omission  of  one  of  these 
subjects  from  the  title  renders  the  charter  still  more  repugnant  to  the 
Constitutional  requirement  adopted  in  1864.  Assuming  this  law  to  be 
unconstitutional  and  consequently  void  and  liable  to  be  set  aside  at 
any  time,  it  follows  that  the  Reading  Railroad  Company,  mining  and 
selling  coal  upon  the  authority  alleged  to  be  derived  from  that  charter, 
has  been  acting  not  only  without  warrant  of  law  but  in  direct  viola- 
tion of  law.     The  Act  of  April  6,  1833,  provides : 

"Whereas,  it  is  contrary  to  the  laws  and  policy  of  the  state,  for 
any  corporation  to  prevent  or  impede  the  circulation  of  landed  property 
from  man  to  man,  without  a  license  from  the  commonwealth,  and  no 
corporation  either  of  this  state  or  of  any  other  state,  though  lawfully 
incorporated  or  constituted,  can  in  any  case  purchase  lands  within  this 
state,  either  in  its  corporate  name,  or  names  of  any  person  or  persons 
whomsoever  for  its  use,  directly  or  indirectly,  without  incurring  the 
forfeiture  of  said  lands  to  this  commonwealth,  unless  said  purchase  be 
sanctioned  and  authorized  by  an  act  of  the  legislature  thereof,  but 
every  such   corporation,  its  feoffee   or  feoffees,   hold    and   retain   the 


same,  subject  to  be  divested  or  dispossessed  at  any  time  by  the 
commonwealth,  according  to  due  course  of  law." 

It  is  admitted  and  will  not  be  contradicted  that  the  coal  and  iron 
company  is  an  auxiliary  of  the  railroad  company.  All  its  stock  is 
owned  and  its  bonds  guaranteed  by  the  railroad  company.  The  charter 
was  obtained  for  the  railroad  company,  and  the  two  companies  are  in 
every  respect  identical  and  the  same  thing. 

Now,  if  we  are  right  in  our  conclusions  there  may  be  a  race  between 
the  legislature  and  the  Auditor  General  or  his  deputy  escheator,  for 
the  act  provides  further  that  if  any  corporation  shall  hold  lands  in 
violation  of  this  act,  the  same  shall  escheat  to  the  commonwealth  ; 
though  it  is  true  the  legislature  has  the  power  to  remit  the  forfeiture. 

We  say,  therefore,  that  this  railroad  and  coal  and  iron  company,  in 
this  business  of  mining  and  selling  coal,  HAVE  BEEN  ACTING 
WITHOUT  LEGAL  AUTHORITY.  But  if  it  be  assumed  that  this 
is  a  valid  charter  and  that  they  do  have  authority,  we  then  say  we  have 
proven  to  you  that  they  have  been  transacting  their  business  in  a  way 
which  is  not  only  a  misuse  and  an  abuse  of  their  charter,  but  in  a 
way  that  the  law  pronounces  a  conspiracy  and  a  crime.  At  the  com- 
mencement of  this  investigation,  we  called  witnesses  to  show  the  full 
extent  of  the  anthracite  coal  field  known  as  the  northern,  the  central 
and  the  southern  coal  basins.  The  whole  matter  is  condensed  in  the 
statistics  published  by  state  authority,  and  from  these  I  quote  : 

The  total  extent  of  all  the  anthracite  coal  in  Pennsylvania,  in  the 
United  States  and  probably  in  the  world,  is  encompassed  within  472 
square  miles. 

The  author  says :  "  It  is  sometimes  difficult  to  make  people  believe 
that  all  the  anthracite  or  common  hard  coal  of  America,  which  is  used 
everywhere,  of  which  more  than  nineteen  millions  of  tons  are  annually 
mined  and  which  is  sent  for  use  almost  all  over  the  western  world 
really  comes  from  this  one  small  locality  in  Eastern  Pennsylvania.  If 
these  regions  were  all  brought  together  into  one  body,  they  would  only 
form  a  small  country  twenty  miles  wide  and  a  little  less  than  twenty- 
four  miles  long." 

We  have  thus  established  by  the  evidence,  gentlemen,  that  all  the 
coal  of  this  kind  in  the  commonwealth  and  in  the  United  States,  is 
comprised  within  these  three  or  four  basins :  some  of  the  witnesses 
speaking  of  four,  some  of  three.  We  went  further  and  established  the 
fact,  that  the  only  avenues  to  market  for  this  coal  were  by  way  of  the 


Philadelphia  and  Reading  Railroad,  the  Lehigh  Valley  Railroad,  the 
New  Jersey  Central  Railroad,  the  Delaware  and  Hudson  Canal,  the 
Delaware,  Lackawanna  and  Western  Railroad,  and  the  Pennsylvania 
Coal  Company.  Some  of  these  are  mining  companies  which  control 
transportation  companies.  We  have  also  the  admission — though  it  is 
a  fact  that  you  all  know  by  observation — that  the  only  avenue  to 
market  lor  the  coal  mined  in  what  is  known  as  the  Schuylkill  region  is 
over  the  Reading  Railroad  or  lines  controlled  by  the  Reading  Railroad 
Company.  We  went  further  and  showed  you,  by  the  testimony  and 
by  the  admitted  agreement,  that  with  the  exception  of  a  small  portion 
of  the  northern  basin,  the  coal  from  which  may  go  over  the  New  York 
and  Erie,  and  a  very  small  portion  of  the  western  basin,  the  coal  from 
which  may  go  down  the  Philadelphia  and  Erie  and  over  the  Pennsyl- 
vania Central  and  other  roads,  the  whole  of  this  coal  must  pass  over 
the  roads  controlled  by  these  six  corporations. 

The  joint  resolution  under  which  this  honorable  committee  was 
appointed,  says,  "  It  has  been  represented  upon  good  authority  that  the 
Philadelphia  and  Reading  Railroad  Company  have  conspired  to  im- 
properly control  the  mining  and  transporting  and  price  of  coal.  The 
complaint  is  of  grave  import,  says  the  resolution,  and  warrants  a  care- 
ful investigation.  The  evideuce  establishes  the  fact  that  there  is  AN 
AGREEMENT  BETWEEN  THESE  SIX  COMPANIES,  that  the 
combination  was  formed  in  the  latter  part  of  the  fall  of  1872,  and  that 
the  terms  of  the  agreement  have  been  executed  or  carried  out  since 
the  formation  of  the  combination. 

The  evidence  shows  that  these  six  companies  have  divided  between 
them  the  whole  coal  tonnage  going  to  tide-water,  to  each  company  is 
alloted  its  quota,  THEY  HAVE  FIXED  AN  ARBITRARY  TRICE 
FOR  THE  COAL,  and  agreed  that  from  the  price  so  fixed  there  should 
be  no  abatement.  You  have  been  furnished  with  the  prices  for  Port 
Richmond,  and  the  price  fixed  by  the  Coal  Exchange  or  the  Coal  and 
Iron  Company  at  Port  Carbon.  The  facts  constituting  the  grave 
charge  are  proven,  THE  LAW  PRONOUNCES  THE  COMBINA- 
TION IMPROPER. 

The  paper  from  which  I  am  about  to  read  is  admitted  to  be  the 
agreement  between  the  six  companies  and  has  been  placed  in  evidence. 
I  shall  not  read  its  entire  contents,  but  only  such  parts  of  it  as  I  deem 
to  be  necessary  in  this  argument.     It  contains  the  following : — 

"  That  a  standing  oommittee  of  six,  composed  of  one  representative 
of  each  interest,  be  appointed  for  the  season,  to  meet  monthly,  or 


8 

oftener,  at  the  call  of  the  chairman,  to  determine  prices  and  all 
questions  relative  to  tonnage  to  competitive  points,  and  to  have  power, 
from  time  to  time,  to  permit  an  increase  or  require  a  curtailment  of 
shipments  to  competitive  points,  with  a  view  of  regulating  the  relative 
demand  and  supply,  provided  that  any  increase  or  diminution  of  ship- 
ments be  based  upon  the  percentage  of  allotment  above  mentioned,  so 
that  each  interest  shall  be  entitled  to  its  proper  proportion  of  the 
aggregate  competitive  tonnage,  whatever  the  same  may  be." 

You  will  remember,  gentlemen,  that  the  aggregate  fixed  upon  to  go 
to  tide-water  was  ten  millions  of  tons.  Of  this,  the  Philadelphia  and 
Reading  Railroad  Company  was  to  have  as  its  allotment  2,585,000 
tons  ;  the  Lehigh  Valley  Railroad  Company  was  to  have  1,588,000 
tons ;  the  New  Jersey  Central  Railroad  Company  was  to  have  1,615,000 
tons  ;  the  Delaware  and  Hudson  Canal  Company,  1,837,000  tons  ;  the 
Delaware,  Lackawanna  and  Western  Railroad  Company,  1,380,000 
tons;  the  Pennsylvania  Coal  Company,  985,000  tons — being  in  all 
10,000,000  tons. 

This  agreement  provides  further :  "  No  commission  whatever  to  be 
allowed  upon  coal  sold  at  yearly  prices,  and  no  contracts  at  yearly 
prices  to  be  made  with  anyone  but  consumers  and  retailers,  and  then 
only  upon  the  condition  that  all  cargoes  of  coal  so  sold  shall  be 
received  by  the  purchaser  and  taken  upon  the  wharf,  and  not  sold  or 
transferred  afloat.  No  sizes  to  be  sold  at  yearly  or  season  prices  except 
lump,  steamboat,  broken,  egg  and  chestnut,  and  egg  only  to  consumers. 
No  commissions  exceeding  15  cents  per  ton  to  be  allowed  to  any  party 
buying  at  monthly  circular  prices,  and  then  only  to  such  as  purchase 
at  least  25,000  tons  of  coal  per  annum.  *         *         *         * 

No  allowances  to  be  made  for  impurity  of  coal,  imperfection  in  prepa- 
ration, short  weight,  or  any  other  reason,  without  the  approval  of  the 
committee  of  six,  to  whom  all  such  claims  are  to  be  reported." 

The  committee  of  six  to  have  power  to  call  for  monthly  or  other 
reports  for  each  interest  upon  any  subject  over  which  they  have 
control,  and  to  have  authority  if  they  desire  to  examine  the  sales  and 
tonnage  books  and  accounts  of  any  company  or  corporation. 

By  the  witness,  Mr.  Parrish,  who  identified  this  paper  as  THE 
AGREEMENT  BETWEEN  THE  SIX  COMPANIES,  IN  OTHER 
WORDS,  AS  THE  CONSPIRACY,  the  combination  or  confedera- 
tion, we  established  one  other  fact:  that  in  the  years  1873  and  '74  this 
programme  had  been  carried  out — it  was  not  merely  prospective  but  was 


9 

the  programme  under  which  the  six  great  corporations  had  been  acting 
in  1873  and  1874— and  that,  with  the  exception  of  a  diminution  or  some- 
thing of  that  kind  in  the  price  of  one  of  the  articles  of  coal,  a  very 
immaterial  alteration,  it  was  the  programme  under  which  they  were  at 
present  acting.  We  submitted  this  agreement  to  you  and,  I  repeat, 
we  have  proven  that  it  is  the  agreement  under  which  the  six  companies 
have  been  acting  for  the  last  two  years. 

Now,  gentlemen,  you  will  remember  that  earlier  in  the  testimony — 
and  I  am  not  taking  up  the  testimony  in  the  order  in  which  it  was 
adduced  before  you,  but  in  a  different  order — you  will  remember  that 
earlier  in  the  testimony  we  succeeded  in  getting  in  evidence  what  is 
known  as  the  Constitution  and  By-Laws  of  the  Coal  Exchange.  This 
is  a  combination,  confederation,  agreement  or  whatever  you  are  disposed 
to  call  it,  between  one  of  these  incorporations,  the  Philadelphia  and 
Heading  Coal  and  Iron  Company,  and  the  other  producers  of  coal  in 
what  is  known  as  the  Schuylkill  region.  So  far  as  I  know,  with  a  few 
exceptions,  they  have  all  signed  it;  at  all  events  certainly  a  large 
number  of  them  have  signed  it.  The  Constitution  provides,  in  the 
fourth  section,  that  "the  said  officers  shall  be  elected  by  ballot  on  the 
last  Thursday  of  each  year,  together  with  a  commitee  of  nine  " — (the 
other  committee,  gentlemen,  was  a  committee  of  six  ;  this  provides  for 
a  committee  of  nine) — "  which  shall  meet  monthly  to  establish  a 
minimum  price  for  each  and  every  size  of  coal  for  the  month  following 
for  the  line  and  city  trade." 

Senator  Herr  :  Where  is  the  evidence  for  the  allegation  that  the 
production  was  to  be  limited  ?  According  to  Mr.  Parrish,  it  was  only 
the  surplus  and  that  was  only  to  be  limited  when  they  had  no  market. 
That  is  my  recollection  on  the  point.  The  counsel  will  see  that  it  is 
a  very  serious  matter,  and  if  he  will  just  refer  to  the  evidence  on  which 
he  bases  his  proposition,  he  may  throw  some  light  upon  it. 

Mr.  Lane :  I  can  only  reply  to  the  senator's  query  by  referring  to 
the  language  of  the  agreement,  which  I  have  already  quoted  and  which 
I  will  again  read.  It  is  as  follows :  "  That  a  standing  committee  of 
six,  composed  of  one  representative  of  each  interest,  be  appointed  for 
the  season,  to  meet  monthly  or  oftener,  at  the  call  of  the  chairman,  to 
determine  prices  and  all  questions  relative  to  tonnage  to  competitive 
points,  and  to  have  power,  from  time  to  time,  to  permit  an  increase  or 
require  a  curtailment  of  shipments  to  competitive  points." 


10 

Senator  Herr :  The  language  is  "shipments  to  certain  points"  or 
"  to  competitive  points."  There  was  no  limit  upon  the  production  ;  the 
matter  relates  only  to  a  surplus.  They  could  make  contracts  with 
other  parties ;  that  is  my  recollection  of  the  evidence.  If  I  am  wrong, 
the  gentleman  can  correct  me. 

Mr.  Lane :  i  do  not  desire  to  correct  the  senator,  because  we  only 
differ  in  the  fact  that  he  is  upon  one  point  while  I  am  upon  another. 
I  am  now  only  speaking  of  the  contract  entered  into  between  these 
companies,  and  I  am  speaking  of  the  testimony  of  Mr.  Parrish, 
wherein  he  says  that  this  contract  was  carried  out ;  I  have  not  gone 
any  further  as  to  the  testimony. 

The  Constitution  of  the  Schuylkill  Coal  Exchange,  which,  as  I  have 
already  stated,  was  signed  by  the  Coal  and  Iron  Company  and  other 
operators  provides  that  "  the  said  officers  shall  be  elected  by  ballot  on 
the  last  Thursday  of  each  year,  together  with  a  committee  of  nine, 
which  committee  shall  meet  monthly  to  establish  a  minimum  price  for 
each  and  every  size  of  coal,  for  the  month  following,  for  the  line  and 
city  trade."  And,  as  I  am  upon  that  point.  I  desire  to  say  now  that 
we  have  distinctly  proven  that  for  the  last  two  years  the  price  for  coal 
has  been  established  for  every  month,  and  the  price  published  by  the 
Coal  and  Iron  Company.  "  And  shall  also  have  full  power  and 
authority  to  curtail  the  shipments  or  stop  the  production  if  necessary 
— providing  that  all  curtailments  or  stoppages  shall  bear  equally  on  all 
collieries — or  transact  any  other  business  which  may  be  for  the  general 
interest  of  the  operators. " 

The  By-Laws  contain  a  prohibition  against  any  person  not  a  mem- 
ber, not  representing  a  member  or  not  invited  by  a  vote  of  the 
association,  being  present  at  or  taking  part  in  any  meeting.  It  thus 
appears  to  be  a  secret  association.  Certain  publications  by  their 
authority  appeared  in  the  newspapers,  but  you  will  see,  by  section  fifth 
of  the  By-Laws,  that  THIS  IS  A  SECRET  ASSOCIATION.  The 
section  reads  :  "  No  person  who  is  not  a  member  or  who  does  not  repre- 
sent a  member,  or  who  is  not  invited  by  a  vote  of  the  association,  shall 
be  present  and  take  part  in  any  meeting." 

Section  tenth  provides  that  "  We  do  hereby  agree  that  the  action  of 
the  combined  companies  shall  govern  all  coal  for  competitive  points 
that  goes  to  Port  Richmond  for  shipment,  and  all  that  is  shipped  by 
way  of  the  Schuylkill  Canal,  and  consigned  to  points  upon  or  through 
the  line  of  the  Delaware  and  Raritan  Canal  for  the  shipping  season  of 


11 

1875,  and  we  do  hereby  agree  to  abide  by  such  action,  and  do  empower 
the  President  or  Vice-President  of  the  Philadelphia  and  Reading  Coal 
and  Iron  Company  to  represent  ua  in  the  premises,  and  pledge  our- 
selves to  do  all  things  necessary  to  carry  out  the  same. 

Article  first  provides  that  "A  minimum  price  shall  be  established,  as 
above  stated,  for  each  and  every  size  of  coal  to  be  fixed  at  Port  Car- 
bon, and  to  be  in  force  for  the  month  following." 

Article  third  provides  that  "  Whenever  coal  is  shipped  according  to 
orders  and  is  refused  by  the  consignee,  no  coal  is  to  be  sold  to  the 
party  so  refusing  until  he  or  they  shall  have  paid  to  the  consignor  all 
losses  or  expenses  arising  from  the  transfer  and  resale  of  such  coal. 
The  facts  thereof  shall  at  once  be  reported  by  the  consignor  to  the 
president  of  the  committee  on  prices,  who  shall  have  power  to  appoint, 
if  necessary,  an  inspector,  whose  report  shall  be  laid  by  the  president 
before  the  committee  for  its  further  action  thereon." 

It  is  further  provided  :  "All  bills  for  coal  are  payable  on  or  before 
the  tenth  day  of  the  month  following  that  in  which  the  coal  is  shipped, 
but  no  penalty  shall  be  attached  for  non-paymeut  until  after  the 
twentieth.  Interest  shall  be  added  on  all  coal  sold  on  time  from  the 
first  day  of  the  month  following  that  in  which  the  coal  is  delivered  at 
the  shipping  point  for  shipment  by  railroad,  and  from  date  of  bill  of 
lading  for  shipment  by  canal." 

"  While  we  bind  ourselves  in  honor  to  honestly  and  faithfully  carry 
out  the  above  resolutions,  we  further  agree  to  allow  no  commission, 
abatement  or  deduction  from  the  monthly  circular  rates,  nor  allow  any 
agent  or  middle  interest  to  divide  his  or  their  commissions  or  profits 
with  any  manufacturer,  dealer  or  consumer,  or  make  any  allowance  or 
concession  in  price  from  the  monthly  rates  for  any  cause  whatever." 

We  have  said,  gentlemen  of  the  committee,  that  this  combination, 
into  which  these  corporations  have  entered,  is  not  only  in  conflict  with 
the  law,  but  that  IT  IS  A  CRIME  ;  and  in  saying  this,  gentlemen,  we 
do  not  give  utterance  merely  to  our  own  individual  opinion.  We  say 
that  a  combination  or  an  agreement  of  the  character  of  this  one,  and 
one  so  very  like  that  which  we  have  now  read  as  to  be  almost  identical 
with  it,  has  already  been  passed  upon  by  the  Supreme  Court  of  Penn- 
sylvania. I  propose  to  read  from  it  such  parts  as  are  similar  to  the 
one  in  this  case,  and  such  parts  as  I  think  are  very  material  to  the 
question  here  raised ;  so  that,  having  the  two  before  you  together,  you 
may  be  enabled  to  show  the  legislature,  if  you  can,  when  making  up 


12 

the  report  which  you  propose  to  frame  and  submit  to  that  body, 
wherein  a  combination,  which  has  been  PRONOUNCED  BY  THE 
SUPREME  COURT  OF  PENNSYLVANIA,  TO  BE  ILLEGAL, 
A  MONOPOLY,  AND  THEREFORE  A  CRIME,  differs  from  the 
combination  which  has  been  entered  into  by  the  six  carrying  com- 
panies on  the  one  hand,  and  the  combination  which  has  been  entered 
into  by  the  Philadelphia  and  Reading  Coal  and  Iron  Company  and  the 
operators  on  the  other  hand. 

'*  The  contract  to  which  I  now  call  your  attention,  was  entered  into 
the  15th  day  of  February,  A.  D.  1866,  between  the  Fall  Brook  Coal 
Company,  party  of  the  first  part ;  the  Morris  Run  Coal  Company, 
party  of  the  second  part;  of  the  Blossburg  Coal  region,  as  follows, 
to  wit : — 

'  The  said  coal  companies  do  severally  agree  with  each  other  that 
the  market  for  bituminous  coal  from  the  Blossburg  and  from  the  Bar- 
clay regions  (except  as  hereinafter  mentioned),  shall  be  divided 
between  the  two  coal  regions,  so  that  the  Blossburg  region  shall  have 
the  right  and  privilege  of  supplying,  by  the  said  two  companies  above 
mentioned,  70  per  cent,  of  the  whole  quantity  of  coal  sent  to  market, 
and  the  Barclay  region  30  per  cent. ;  and  that  the  shares  of  each 
region  shall  be  subdivided  between  the  coal  companies  of  each  region 
as  they  may  agree  among  themselves.' 

'  It  is  understood  that  all  coal  mined  and  sold  by  the  Morris  Run 
Coal  Company  to  the  Salt  Company  of  Onondaga,  under  their  lease  of 
the  said  salt  company  mines,  and  used  for  the  manufacture  of  salt  on 
the  Onondaga  salt  reservation,  shall  not  be  counted  as  a  part  of  said 
Morris  Run  Coal  Company's  portion  of  the  market,  and  said  coal  shall 
not  be  considered  as  included  in  this  agreement  in  any  way  whatever, 
but  the  same  is  expressly  excepted  herefrom.' 

'  The  business  contemplated  by  this  agreement  shall  be  under  the 
control  of  an  executive  committee  of  three  persons,  one  to  be  appointed 
by  the  party  of  the  first  part,  one  by  the  party  of  the  second  part, 
and  one  by  the  parties  of  the  third,  fourth  and  fifth  parts,  jointly,  and 
until  otherwise  ordered  by  the  parties  respectively,  the  members  of  the 
committee  shall  consist  of,  &c.         *  *  *         *         *         *•' " 

You  will  remember,  gentlemen  of  the  committee,  that  in  the  Coal 
and  Iron  Company's  division  of  votes,  the  regulation  was  that  every 
fifty  thousand  tons  should  constitute  a  vote.  In  this  case  the  votes  are 
distributed  between  the  parties,  as  will  appear  from  the  following: 


13 

u  In  the  decision  by  the  said  committee  of  all  questions  of  general 
interest  of  the  parties  hereto,  the  members  of  the  committee  from  the 
Blossburg  region  shall  have  two  votes,  and  the  member  from  the  Barclay 
region  one  vote ;  but  in  the  decision  of  questions  of  adverse  interests 
between  the  two  coal  regions,  the  member  of  the  committee  from  the 
Barclay  region  shall  have  equal  power  with  the  Blossburg  members; 
with  provisions  for  an  umpire  in  case  of  a  tie  vote." 

*  *  *  'The  committee  shall  appoint  a  general  sales  agent,  and  such 
other  agents  and  assistants/  &c,  to  *  *  *  be  paid  by  the  several  parties 
hereto  in  proportion  to  the  respective  portion  of  the  market  supplied 
by  them.' 

'  The  average  price  received  for  coal  will  be  arrived  at  in  the  following 
manner,  to  wit,  &c.  :     *  *  * 

The  committee  will,  from  time  to  time,  adjust  the  prices  of  coal  for 
the  different  markets,  and  the  conditions  of  the  sale  thereof.' 

'  The  committee  will  from  time  to  time  adjust  and  fix  the  rates  of 
freight  from  Watkins,  and  such  other  matters  as  pertain  thereto.'  *  * 

'It  being  understood  and  agreed  by  said  parties  that  all  sales,  ship- 
ments and  deliveries,  by  or  for  either  or  any  of  said  parties,  except  as 
herein  specifically  excluded  from  the  terms  of  this  agreement,  shall  as 
between  these  parties  and  for  the  purposes  of  this  agreement  be  deemed 
to  be  made  by  said  committee  through  such  general  sales  agent,  in  the 
name  and  for  the  account  of  the  party  furnishing  the  coal,  and  that  each 
of  said  parties  shall,  unless  said  committee  shall  otherwise  direct  or 
provide,  refer  and  send  at  once  all  orders  or  propositions  received  by 
them  respectively,  relating  to  the  sale  of  coal,  to  said  general  sales 
agent  prior  to  any  action  by  themselves  thereon,  and  said  general  sales 
agent  shall  advise  said  parties  from  time  to  time  of  the  whole  amount 
of  coal  shipped  by  all  the  parties,  and  shall  direct  a  suspension  of  ship- 
ments or  deliveries  by  either  party  making  such  sales  or  deliveries 
beyond  its  proportion.' 

'  Each  party  hereto  agrees  that  they  will  not  cause  or  permit  any  coal 
to  be  shipped  or  sold  otherwise  than  as  the  same  has  been  herein  agreed 
upon,  and  that  all  rules  and  regulations  of  said  executive  committee,  in 
relation  to  the  business  provided  for  in  this  agreement,  shall  be  truly 
and  faithfully  carried  out." 

Now,  gentlemen,  after  examining  the  constitution  and  by-laws  of 
the  Coal  Exchange,  and  after  comparing  them  with  the  contract  or 
agreement  that  I  have  just  read,  and  having  compared  the  agreement 


14 

entered  into  by  the  six  carrying  companies  with  the  agreement  from 
which  I  before  quoted,  I  say  to  you  that  you  will  fail  to  see  any  mate- 
rial point  upon  which  they  differ.  The  OBJECT  OF  BOTH  WAS  TO 
KEEP  UP  THE  PBICE  OF  COAL,  and  the  manner  of  attaining  that 
object  was  in  each  case  the  same — to  limit,  curtail,  and,  if  necessary, 
stop  production.  In  this  other  instance,  the  validity  of  the  contract  was 
tested  in  the  courts,  and,  as  I  have  said,  we  have  a  decision  of  the  Su- 
preme Court  upon  the  question.  Long  before  that  decision,  the  law 
was  well  understood  by  the  bar  and  bench  to  be  that  all  contracts  in 
restraint  of  trade  were  bad.  Within  a  very  recent  period,  the  courts 
have  decided  that  certain  contracts  which  were  partially  in  restraint  of 
trade  might  be  carried  out,  but  expressly  held  that  all  contracts 
which  were  absolutely  in  restraint  of  trade  were  void  and  could  not 
be  carried  out,  because  such  contracts  are  against  public  policy.  The 
decision  to  which  I  call  your  attention  covers  the  whole  case,  and  cites 
all  the  authorities.  I  refer  to  Morris  Run  Coal  Co.  vs.  The  Barclay 
Coal  Co.,  18  P.  F.  Smith,  173. 

Judge  Agnew,  in  delivering  the  opinion  of  the  court  says  : — "  The 
illegality  of  the  contracts  affecting  public  trade  appears  in  the  books 
under  many  forms.  The  most  frequent  is  that  of  contracts  between 
individuals  to  restrain  one  of  them  from  performimg  a  business  or 
employment.  The  subject  was  elaborately  discussed  in  the  leading  case 
of  Mitchell  vs.  Reynolds,  1  Peere  Williams  181  ;  to  be  found  also  in 
1  Smith's  Leading  Cases,  172." 

Senator  Herr.  The  opinion  from  which  you  are  reading  is  that  of 
Judge  Agnew  ? 

Gen.  Lane.  From  Judge  Agnew's  opinion;  yes  sir.  It  proceeds 
as  follows  :  The  distinction  is  there  taken  which  now  marks  the  current 
of  judicial  decisious  everywhere:  that  a  restraint  upon  a  trade  or 
employment  which  is  general  is  void,  being  contrary  to  public  interest, 
and  really  beneficial  to  neither  party,  and  oppressive  at  least  to  one. 

"  General  restraints  (says  Parker,  J.)  are  all  void,  whether  by  bond, 
covenant  or  promise,  with  or  without  consideration,  and  whether  it  be 
of  the  party's  own  trade  or  not ;  "  citing  Crokc  Jam.  596 ;  2  Buls.  136  ; 
Allen  67.  To  obtain,  he  says,  the  sole  exercise  of  any  known  trade 
throughout  England,  is  a  complete  monopoly,  and  AGAINST  THE 
POLICY  OF  THE  LAW.  A  reason  given  is  "  the  great  abuses  these 
voluntary  restraints  are  liable  to,  as,  for  instance,  from  corporations 
who  were  perpetually  laboring  for  exclusive  advantages  in  trade,  and  to 


15 

reduce  it  into  as  few  hands  as  possible."  In  reference  to  a  contract  not 
to  trade  in  any  part  of  England,  it  is  said,  there  is  something  more  than 
a  presumption  against  it,  because  it  never  can  be  useful  to  any  man  to 
restrain  another  from  trading  in  all  places,  though  it  may  be  to  restrain 
him  from  trading  in  some,  unless  he  intends  a  monopoly,  which  is  a 
crime.  These  principles  have  been  sustained  in  many  cases  which 
need  not  be  cited,  as  most  of  them  will  be  found  in  Mr.  Smith's  note 
to  the  leading  case.  What  is  injurious  to  the  public  interest  is  void 
on  the  ground  of  public  policy. 

'  The  general  rule  (said  Woodward,  C.  J.)  is  that  all  restraints  of 
trade,  if  nothing  more  appear,  are  bad :  Keeler  vs.  Taylor.  3  P.  F. 
Smith  468.  That  case  may  be  instanced  as  a  strong  illustration  of  the 
rule  as  to  what  is  not  a  reasonable  restriction  ;  and  the  principles  I  have 
been  stating  are  recognized  in  the  opinion.  Keeler  agreed  to  instruct 
Taylor  in  the  art  of  making  platform  scales,  and  to  employ  him  in  that 
business  at  $1.75  per  day.  Taylor  engaged  to  pay  Keeler  or  his  legal 
representatives  $50  for  each  and  every  scale  he  should  thereafter  make 
for  any  other  person  than  Keeler,  or  which  should  be  made  by  impart- 
ing his  information  to  others.  This  was  held  to  be  an  unreasonable 
restriction  upon  Taylor's  labor,  and  therefore  void,  as  in  restraint  of 
trade  ********** 

'  There  is  a  certain  freedom  which  must  be  allowed  to  every  one  in 
the  management  of  his  own  affairs.     When   competition  is  left  free, 
individual  error  or  folly  will  generally  find  a  correction  in  the  conduct 
of  others.     But  here  is  a  combination  of  all  the  companies  operating 
in  the  Blossburg  and  Barclay  mining  regions,  and  controlling  their 
entire  productions.    They  have  COMBINED  TOGETHER  TO  GOV- 
ERN THE  SUPPLY  and  the  price  of  coal  in  all  the  markets  from  the 
Hudson  to  the  Missisippi  rivers  and  from  Pennsylvania  to  the  Lakes. 
This  combination  has  a  power  in  its  confederated  form  which  no  indi- 
vidual action  can  confer.     The  PUBLIC  INTEREST  MUST  SUC- 
CUMB  to  it,  for  it  has  left  no  competition  free  to   correct  its  baleful 
influence.     When  the  supply  of  coal  is  suspended,  the  demand  for  it 
becomes  importunate,  and  prices  must  rise.     Or  if  the  supply  goes 
forward,  the  price  fixed  by  the  confederates  must  accompany  it.     The 
domestic  hearth,  the  furnaces  of  the  iron  master,  and  the  fires  of  the 
manufacturer,  all  feel  the  restraint,  while  many  dependent  hands  are 
paralyzed,  and  hungry  mouths  are  stinted.     The  influence  of  a  lack 
of  supply  or  a  rise  in  the  price  of  an  article  of  such  prime  necessity, 


16 

cannot  be  measured.  It  permeates  the  entire  mass  of  community,  and 
leaves    few  of  its  members  untouched  by  its  withering  blight." 

Says  Judge  Agnew  :  Such  a  combination  is  more  than  a  contract — 
it  is  an  offence.  In  all  such  combinations  where  the  purpose  is  injurious 
or  unlawful,  the  gist  of  the  offence  is  the  conspiracy.  Men  can  often 
do  by  the  combination  of  many,  what  severally  no  one  can  accomplish, 
and  even  what  when  done  by  one  would  be  innocent."  Instances  are 
given  in  The  Commonwealth  vs.  Carlisle  Bright  R.  40,  among  those 
mentioned  as  criminal  is  a  combination  of  the  bakers  of  a  town  to  hold 
up  the  article  of  bread,  and  by  means  of  the  scarcity  thus  produced  to 
extort  an  exorbitant  price  for  it.  The  case  presented  is  precisely 
parallel  with  the  present  case ;  it  is  the  effect  of  the  act  upon  the  public 
which  gives  that  case,  and  this,  its  evil  aspect  as  the  result  of  confede- 
ration. 

Without  going  on,  gentlemen,  to  read  any  further  in  the  case,  I  may 
say  that  the  unanimous  conclusion  of  the  court  was  that  this  combi- 
nation WAS  ILLEGAL  AND  THEREFORE  VOID. 

Now,  I  am  unable  to  see  any  difference  or  any  distinction  between 
this  combination  passed  upon  by  the  Supreme  Court  of  Pennsylvania 
and  the  combination  now  under  investigation  by  this  committee.  Both 
were  for  a  RESTRAINT  OF  TRADE ;  both  were  to  fix  arbitrary  prices 
upon  an  article  of  prime  necessity.  The  one  condemned  by  the  court 
controlled  all  of  one  region  :  there  was  no  competition  there.  The  one 
now  under  investigation  controls  all  of  another  region,  and  not  only 
all  of  that  region,  but,  so  far  as  we  have  any  knowledge,  all  the  coal 
of  that  kind  in  the  world,  certainly  all  that  has  ever  been  discovered 
in  Pennsylvania. 

Judge  Morton,  in  the  case  of  Alger  vs.  Thacher,  19  Pickering,  54, 
in  speaking  of  these  combinations  or  contracts  in  restraint  of  trade, 
uses  this  language  :  "  The  unreasonableness  of  contracts  in  restraint  of 
trade  and  business  is  very  apparent  from  several  obvious  considerations. 
First,  such  contracts  injure  the  parties  making  them,  because  they 
diminish  their  means  of  procuring  livelihoods  and  a  competency  for 
their  families.  They  tempt  improvident  persons,  for  the  sake  of 
present  gain,  to  deprive  themselves  of  the  power  to  make  future 
acquisition,  and  they  expose  such  persons  to  imposition  and  oppression. 
Second,  They  tend  to  deprive  the  public  of  the  service  of  men  in  the 
employments  and  capacities  in  which  they  may  be  most  useful  to  the 
community  as  well  as  themselves.     Third,  THEY   DISCOURAGE 


17 

INDUSTRY  and  enterprise,  and  diminish  the  products  of  ingenuity  and 
skill.  Fourth,  They  prevent  competition  and  ENHANCE  PRICES. 
Fifth,  They  expose  the  public  to  all  the  evils  of  monopoly,  and  this 
especially  is  applicable  to  wealthy  companies  and  large  corporations, 
who  have  the  means,  unless  restrained  by  law,  to  exclude  rivalry, 
MONOPOLIZE  BUSINESS  AND  ENGROSS  THE  MARKET. 
Against  evils  like  these,  wise  laws  protect  individuals  and  the  public 
by  declaring   all  such  contracts  void." 

[At  this  point  the  committee  adjourned  till  five  o'clock,  p.  m.] 

Evening  Session. 

Pursuant  to  an  adjournment,  the  committee  reassembled  at  five 
o'clock,  p.  m.,  when  Gen.  Lane  immediately  proceeded  with  his  argu- 
ment— resuming  as  follows  : — 

Mr.  Chairman  and  gentlemen  of  the  committee : — It  will  not  be 
claimed  that  the  Philadelphia  and  Reading  Coal  and  Iron  Company 
or  the  Philadelphia  and  Reading  Railroad  Company  possessed  any 
chartered  right  to  make  a  contract  such  as  that  which  they  have  made. 
No  power  to  make  any  such  contract  is  given  to  them  in  their  charter 
in  words,  and  the  claim  upon  which  its  assumption  is  sought  to  be 
justified,  rests  solely  upon  an  implication.  If  you  will  look  over  the 
charter  of  the  Coal  and  Iron  Company,  you  will  find  that,  while  they 
have  many  powers  therein  enumerated,  this  is  not  one  of  them.  If  the 
contract  was,  as  1  have  claimed,  against  public  policy,  one  calculated 
to  produce  and  which  did  produce  a  monopoly — and  therefore  a  crime 
— it  was  clearly  an  abuse  of  the  franchise  granted  to  this  company  by 
the  legislature.  THE  GIST  OF  THE  OFFENCE  IS  THE  CON- 
SPIRACY. 

That  the  two  companies  or  one  of  the  companies  (both  being  the 
same  in  everything  but  name)  did  enter  into  the  combination  with  the 
five  other  companies  is  clearly  proven ;  that  one  of  the  companies  or 
the  two  companies  (both  being  identical)  did  enter  into  a  combination 
with  the  other  coal  producers  of  the  Schuylkill  region  is  clearly 
proven  ;  that  the  agreement  or  contract  entered  into  with  the  other 
five  companies  was  carried  out,  is  just  as  clearly  proven'  by  the  wit- 
nesses, and  as  a  conclusion  of  law  they  have  misused  and  abused  their 
franchise.  And  here  let  me  observe  that  we  hesitated  somewhat  before 
going  into  that  kind  of  proof,  because  it  was  so  well  known  by  every, 
man    whose  attention  had  been  called  to  the  business,  it  was  a  fact  so 


18 

universally  accredited  and  a  matter  of  sucli  public  notoriety  that  a 
combination  .such  as  here  alleged  had  existed,  that  it  had  maintained 
the  price  of  coal  and  caused  the  price  to  appreciate  both  at  retail  and 
at  wholesale  at  Richmond,  that  we  did  not  like  to  go  very  far  in 
establishing  before  you,  gentlemen,  a  fact  which  to  all  the  world  was 
already  perfectly  well  known.  We  took  it  for  granted  that  we  were 
not  here  before  you  to  play  at  the  game  of  special  pleading  with  lawyers 
and  judges,  but  we  assumed  that  we  stood  before  gentlemen  who  were 
seeking  information  from  all  proper  sources  and  who,  being  reasonably 
well  informed  upon  current  events,  knew  of  this  combination;  for, 
unless  you  are  all  Rip  Van  Winkles  and  have  been  asleep  for  the  last 
three  or  four  years,  you  did  know  of  it.  For  this  reason  we  hesitated 
a  little,  I  say,  before  we  went  on  to  prove  that  this  combination  had 
been  carried  out;  well,  in  the  course  of  the  testimony  the  fact  very 
naturally  became  apparent.  Mr.  Parrish,  in  answer  to  the  question, 
"  was  this  combination  carried  out  by  the  six  companies,"  said,  "  It 
was."  Mr.  Rorda  testified,  in  his  examination,  that  THE  COMBINA- 
TION WAS  CARRIED  OUT;  he  made  an  arrangement  with  Mr. 
Parrish  to  receive  from  him  twenty-thousand  tons  of  coal;  and  after 
the  arrangement  had  been  entered  into,  Mr.  Parrish  came  to  him  and 
said,  "  I  can't  let  you  have  it;  we  are  not  to  allow  any  commission  by 
the  terms  of  the  agreement."  You  will  remember  it,  gentlemen- 
"  To  allow  you  a  commission  would  be,  by  the  terms  of  the  agreement, 
to  break  the  combination."  He  testifies  distinctly  that  it  was  carried 
out.  All  the  acts  of  the  company,  not  only  as  we  have  them  in 
proof  but  as  admitted  by  them,  show  that  the  intention  was  to  carry 
out  the  terms  of  that  agreement;  in  other  words,  the  intention  was  to 
form  a  perfect,  systematic  combination  by  which  these  six  companies 
should  control  all  the  coal  tonnage  that  should  go  to  tide-water,  and 
tbe  agreement  was  executed  to  the  letter. 

JNow  prior  to  1872,  when  the  Coal  and  Iron  Company  came  into 
existence,  there  was  no  combination  of  this  kind  either  between  the 
carrying  companies  or  between  the  producers.  Indeed  such  a  thing 
was  an  impossibility.  The  law  had  protected  Schuylkill  County  from 
these  corporations  and  combinations  ;  and  while  the  private  operators 
were  in  Schuylkill  County  and  while  the  Reading  Railroad  was 
restricted  to  its  legitimate  business  as  a  common  carrier  only,  while 
the  Railroad  made  its  money,  paid  its  expenses  and  declared  its  divi- 
dends on   what  it  earned  by  tonnage,  and  tonnage  only,  the   private 


19 

operators  were  furnished  with  all  needed  facilities,  while  the  factors 
and  dealers  were  finding  a  market  for  all  the  coal  sent  to  them,  any 
irregularity  being  corrected  by  the  natural  remedy  for  all  such  irregu- 
larities, the  law  of  supply  and  demand,  such  a  combination  was  not  a 
necessity,  such  a  combination  was  an  impossibility.  Every  attempt  to 
raise  prices  by  stopping  production  fur  even  a  limited  period  was 
steadily  resisted  by  the  Railroad  Company,  and  denounced  as  a  short- 
si  ghted  policy.  And  let  me  here  call  your  attention  to  the  language 
made  use  of  by  the  managers  of  the  Reading  Railroad  Company,  at 
that  time,  when  criticising  in  severe  terms  the  policy  adopted  by  the 
workingmen  : — 

:'Auother  great  evil  results  from  the  attempt  of  the  Workingmen's 
Association  to  enforce  the  short-sighted  policy  of  raising  prices  by 
stopping  the  production  of  coal,  forgetting  that  high  prices  and 
uncertainty  of  supply  will  drive  away  buyers,  force  manufacturers  to 
turn  to  other  fuels  and  prevent  the  natural  increase  of  demand  which 
would  result  from  low  prices,  and  which  would  soon  supply  a  certain 
market  for  any  temporary  over-production." 

This  was  the  language  of  the  managers  in  their  report  in  1871, 
before  it  became  necessary  to  improve  Laurel  Run  or  before  this 
Laurel  Run  incorporation  had  been  brought  into  existence.  Now  the 
very  next  annual  report  of  the  managers  of  the  Reading  Railroad 
(that  of  1872)  contains  this  statement:  "Up  to  this  time,  about 
70,000  acres  of  the  best  coal  lands  of  Pennsylvania  have  been 
acquired  and  will  be  held  by  an  auxiliary  company,  known  as  the 
Philadelphia  and  Reading  Coal  and  Iron  Company,  of  which  the 
Philadelphia  and  Reading  Railroad  Company  is  the  only  stockholder. 
The  result  of  this  action  has  been  to  secure  and  attach  to  the 
company's  railroad  a  body  of  coal  lands  capable  of  supplying  all  the 
coal  tonnage  that  can  possibly  be  transported  over  the  road  for 
centuries." 

Now,  gentlemen,  if  they  were  only  securing  lands  in  order  to 
acquire  twnuage,  if  that  was  their  only  object,  one  would  think  that, 
in  laying  hold  upon  such  body  of  coal  lands  as  was  "  capable  of  sup- 
plying all  the  coal  tonnage  that  can  possibly  be  transported  over  the 
road  for  centuries,"  they  were  providing  very  liberally  for  the  future; 
yet  they  were  not  satisfied.  They  had  entered  into  this  combination 
in  lh72,  and  the  other  companies,  so  far  as  we  know,  were  already  in 
a  condition  to  act,  but  still  they  did  not  feel  themselves  secure,  and  in 
the  report  of  the  managers  for  1873,  they  say  : — ■ 


20 

"  The  Philadelphia  and  Reading  Coal  and  Iron  Company  has  con- 
tinued to  increase  its  ownership  of  lands,"  [For  what  purpose,  gentle- 
men ?  They  had  already  70,000  acres,  but  they  continue  to  increase 
their  purchases  of  land,]  "  and  now  control  over  80,000  acres  of  coal 
land,  upon  which  they  have  ninety-eight  collieries.  Most  of  these 
collieries  are  worked  by  lessees,  but  twenty-seven  of  the  largest  of 
them  are  now  open  and  will  be  worked  by  the  company.  The  tonnage 
of  these  lands,  last  year,  was  3,030,880.8,  and  the  rent  derived  from 
this  tonnage  amounted  to  $946,774.69.  Almost  the  entire  issue  of 
$19,000,000  of  the  consolidated  mortgage  loan  was  applied  to  the 
purchase  and  development  of  these  lands;  in  addition  to  which,  the 
bonds  of  the  Coal  and  Iron  Company,  guaranteed  by  the  Philadelphia 
and  Reading  Railroad  Company  to  the  extent  of  §11,130,000,  have 
been  issued  for  the  same  purpose.  Should  the  anticipations  formed 
of  the  coal  trade  for  the  coming  season  prove  correct,  the  managers 
believe  that  the  coal  and  Iron  Company  will,  during  this  year  (which 
is  but  the  second  of  its  existence,)  be  in  receipt  of  an  income 
sufficient  to  pay  the  interest  upon  the  entire  cost  of  this  property." 

Can't  it  be  said,  after  this,  that  the  Coal  and  Iron  Company  must 
have  been  selling  coal  at  a  loss  ?  While  working  for  a  monopoly  of 
all  the  business,  they  were  not  paying  interest  on  the  cost  of  the 
property. 

Now,  gentlemen,  one  would  think  that  their  accumulation  of  coal 
lands  was  already  sufficient  to  satisfy  them.  Seventy-thousand  acres 
was  enough,  they  said,  to  supply  them  with  tonnage  for  centuries: 
now,  they  have  eighty-thousand.  But,  in  their  report  for  1874,  they 
say,  "  The  Philadelphia  and  Reading  Coal  and  Iron  Company  now 
owns  and  controls  about  ninety-thousand  acres  of  anthracite  coal 
lauds."  In  the  report  for  1875,  the  Company  say,  "The  purchase  of 
coal  lands  made  during  the  year  by  the  Philadelphia  and  Reading 
Coal  and  Iron  Company,  added  to  the  previously  acquired,  will  make 
an  aggregate  of  ONE  HUNDRED-THOUSAND  ACRES  OF 
LAND." 

Now,  gentlemen,  if  this  means  anything,  it  certainly  means  that 
this  company  intends  to  buy  up  all  the  lands  for  the  purpose  of 
enabling  it  to  carry  out  its  agreement  with  the  other  companies,  and 
thus  monopolize  the  business. 

'■  When  it  is  considered,"  say  the  managers,  "  that  the  anthracite 
coal  trade  of  the  United  States  has  now  reached  an  annual  product  of 


21 

nineteen  millions  of  tons ;  that  it  has  doubled  every  ten  years  during 
the  past,  and  that  in  ten  years  it  will  be  forty-millions  of  tons ;  that 
the  Philadelphia  and  Reading  Goal  and  Iron  Company  OWNS  AT 
LEAST  ONE-THIRD  OF  ALL  THE  ANTHRACITE  coal  fields 
ol   Pennsylvania.  *  * 

When  the  other  two-thirds  are  owned  by  the  other  five  companies,  all 
this  land  is  placed  in  mortmain;  for  let  it  be  remembered,  that  these 
companies  are  perpetual,  that  they  never  die,  and  that  when  they  own 
the  other  two-thirds  of  this  coal  land — how  much  they  now  own  I  do 
not  kuow,  but  I  do  know  that  it  is  a  very  considerable  amount — when 
they  own  the  other  two-thirds,  EVERY  FOOT  OF  ANTHRACITE 
COAL  LAND  IN  PENNSYLVANIA  WILL  BE  BEYOND  THE 
BEACH  OF  ANY  INDIVIDUAL  OPERATOR. 

When  this  was  all  arranged  satisfactorily,  the  next  move  was  to  get 
rid  of  the  men  at  the  other  end  of  the  line.  The  acquisition  of  this 
large  amount  of  land  and  this  great  number  of  coal  mines  was  but 
one  of  two  objects:  the  other  object  was  to  get  rid  of  what  has  been 
denominated  "the  middle  men,"  in  other  words,  the  factors,  the  men 
who  had  grown  up  with  this  Beading  Bailroad  Company,  had  nursed 
it  from  its  infancy  and  had  paid  it  millions  upon  millions  of  dollars  of 
tonnage.  In  submitting  the  very  large  amount  of  testimony  which 
we  have  presented  to  you,  we  endeavored  to  bring  and,  so  far  as  we 
could  do  so,  did  bring  before  you  the  representative  men  in  each  one 
of  the  different  branches  of  the  coal  business.  We  have  not  called 
all  the  miners,  we  have  not  called  all  the  retail  men,  we  have  not 
called  all  the  factors,  as  we  might  have  done,  but  we  have  called  only 
a  few  from  each  one  of  these  various  departments  of  the  business, 
taking  care  that  these  few  shall  be  representative  of  the  class  for 
which  they  speak.  Among  others,  we  introduced  to  you  Mr.  Joseph 
Van  Dusen,  who  stated  to  you  that  he  had  been  IN  THE  BUSINESS 
FOB  THIBTY  YEABS,  that  he  had  built  up  a  business  of  from  fifty 
to  three  hundred-thousand  tons  per  annum;  that  in  1873  he  could  do 
about  as  much  business,  he  thought,  as  he  did  in  1872  ;  and  that  he  has 
since  known  no  fact  that  changes  his  mind  about  it.  Then,  gentlemen, 
we  called  your  attention  to  the  custom  of  the  railroad,  to  its  rules  with 
shippers,  showing  that  when  these  factors^entered  into  a  contract  with 
the  consignee  in  the  east  or  in  New  York,  the  Bailroad  Company 
required  the  factor  to  deposit  with  it  the  original  ^contract  entered 
into  with  the  consignee  or  the  purchaser.     As  each  cargo  of  coal  went 


22 

forward,  a  bill  of  lading  accompanied  it.  When  the  coal  was  delivered, 
the  consignee  receipted  for  the  coal.  That  was  returned  and  placed 
with  the  railroad.  The  railroad  thereby  became  thoroughly  acquainted 
with  all  the  business  of  these  factors,  knew  just  to  whom  they  were 
selling,  knew  just  whether  the  person  who  made  a  contract  received 
all  the  coal  that  he  had  contracted  for — knew  all  about  it.  Now,  I 
have  never  heard  one  individual  enter  a  single  complaint  against  the 
railroad  for  anything  done  in  that  respect.  These  gentlemen  are 
all  satisfied  with  the  course  of  the  railroad  in  that.  It  was  proper, 
they  say,  and  they  do  not  complain  of  it.  But  there  is  good  ground 
for  complaint  here.  When  the  Coal  and  Iron  Company  came  into 
existence,  it  was  enabled,  by  virtue  of  its  connection  with  the  Railroad 
Company  and  the  information  it  thus  acquired,  to  step  in  and  IN 
ONE  DAY  TAKE  ALL  THIS  TRADE,  knowing  where  the  trade 
was  that  Joseph  Van  Dusen  had  been  thirty  years  in  building  up,  and 
by  depriving  him  of  his  wharf,  take  his  business;  and  I  say  to  you, 
gentlemen  of  the  committee,  that  that  is  a  fair  and  legitimate  cause  of 
complaint.  When  the  Commonwealth  of  Pennsylvania  parted  with  sonie 
of  her  sovereignty  and  gave  it  to  this  Coal  and  Iron  Company,  did  that 
company,  upon  coming  into  the  market,  drive  out  these  middlemen 
BY  FAIR  AND  OPEN  COMPETITION?  NOT  AT  ALL.  The 
Reading  Railroad  Company  owned  the  wharves,  which  were  the 
terminus  by  rail  for  all  coal  going  to  tide-water,  and  it  exercised 
the  arbitrary  power  of  saying  just  who  should  have  the  wharves 
and  who  should  not  have  them.  We  have  proven  to  you  that 
not  only  factors  but  even  miners  of  coal  have  been  deprived  of 
the  privilege  of  having  a  wharf,  for  no  other  reason  than  that  the 
Reading  Railroad  Company  said,  "  we  will  not  give  you  one."  The 
power  which  they  exercise  in  this  respect  may  be  theirs ;  I  do  not  pro- 
pose to  controvert  that;  besides  their  power  is  so  enormous  in  the 
aggregate,  that  it  would  be  hardly  worth  while  to  complain  of  this 
comparatively  trivial  feature  of  it.  We  have  shown  you  that  every 
pound  of  coal  that  goes  out  of  the  Delaware  River  passing  over  the 
Reading  railroad,  must  pass  over  the  Richmond  wharves;  no  man  can 
do  the  business  of  shipping  coal  from  Philadelphia,  unless  he  has  wharf 
facilities  at  Richmond.  This  company  is  enabled  to  grant  or  to  with- 
hold such  facilities  at  its  own  pleasure,  and  while  conferring  them  upon 
a  new  comer  may,  without  a  day's  notice  or  a  moment's  warning, 
deprive   any   old   shipper  of  the  means  of   doing   business.     When 


23 

Joseph  Van  Dusen  had  his  offices  in  Philadelphia,  his  offices  in  New 
Fork,  his  offices  in  Boston ;  when  he  had  a  tonnage  oi'  sixty  or 
seventy-thousand  tons  per  annum ;  when  he  was  making  arrangements 
to  do  as  large  a  business  in  1S73  as  he  had  done  in  1872,  the  circular 
of  December  27th,  1872,  was  issued,  making  it  an  impossibility  for 
him  to  get  a  wharf  another  day.  The  Philadelphia  and  Heading  Coal 
and  Iron  Company  stepped  in,  and  we  have  evidence  that  a  very  con- 
siderable amount  of  the  business  that  was  being  done  by  Joseph  Van 
Dusen,  was  afterwards  done  by  the  Reading  Coal  and  Iron  Company. 

Now,  gentlemen,  you  are  told  that  this  company  has  rendered  itself 
inimical  to  some  of  these  middlemen.  Why,  let  me  ask,  how  could 
the  result  be  otherwise  ?  A  man's  business  is  as  much  his  own  as  is 
his  money ;  and  when  you  deprive  him  of  a  business  for  which  he  has 
.spent  years  in  building  up,  you  deprive  him  of  that  which  is  as 
valuable  to  him  as  is  his  money  or  his  lands.  If  you  give  to  a  corpora- 
tion the  power  to  strike  down  the  business  of  this  or  that  man  in  the 
coal  trade,  why  should  you  withhold,  in  any  other  instance,  a  license 
to  a  corporation  to  strike  down  an  individual  in  any  other  business  ? 
Suppose  the  Commonwealth  of  Pennsylvania  should  LICENSE  or 
empower  a  particular  individual  or  company  TO  SELL  ALL  THE 
DRY  GOODS  that  are  sold  in  Philadelphia,  and  suppose  this  indi- 
vidual or  company  should  issue  to  Messrs.  Hood,  Bonbrigbt  &  Co., 
and  the  other  merchants,  a  circular,  such  as  was  issued  by  this  Railroad 
Company  on  the  27th  of  December,  1872,  stopping  their  business — 
what  would  be  the  effect  of  such  a  proceeding  ?  Why,  gentlemen, 
IT  WOULD  CREATE  A  REVOLUTION.  The  exercise  of  this 
power  on  the  part  of  the  Railroad  Company  may  be  perfectly  natural ; 
we  all  know  how  natural  it  is  for  us  to  stretch  power  when  we  have 
it;  but  I  say  that  to  permit  such  a  power  to  remain  in  any  corpo- 
ration or  any  body  of  men,  is  simply  monstrous. 

But,  as  I  have  said,  in  order  to  maintain  this  combination,  it  became 
necessary  to  strike  down  these  men.  It  could  not  have  been  main- 
tained if  the  factors  and  middlemen  had  been  permitted  to  go  on  and 
sell  as  they  had  been  doing,  and  therefore  it  became  necessary  to  form 
what  you  have  heard  mentioned  as  "the  pool."  We  come,  therefore, 
to  consider  the  evidence  which  sustains  the  allegation  that  this  combi- 
nation had  been  carried  out  by  the  six  companies.  Now,  we  all  know 
that  in  1873  there  was  a  financial  crisis  in  this  couutry,  and  that  every 
industry  of  the  country  other  than  coal,  especially  the  manufacturing 


24 

and  producing  interests  of  the  country,  became  more  or  less  paralyzed. 
Notwithstanding  every  other  article  felt  the  panic  and  became 
depreciated,  you  find  that  day  after  day  and  month  after  montb  the 
price  of  coal  was  appreciating.  Take  the  prices  of  the  Philadelphia 
and  Reading  Coal  and  Iron  Company  for  a  representative  coal,  and 
you  will  find  that,  in  January,  1873,  the  company  was  selling  stove 
coal  at  $5.50,  and  in  January,  1874,  they  were  selling  it  at  $5.75. 
And,  if  this  combination  is  to  be  maintained,  there  is  no  power  to  pre- 
vent their  going  on  increasing  the  price  to  any  amount  that  they  may 
please  to  charge. 

Senator  Rutan :  How  was  it  in  1875 — was  there  any  iucrease 
in  1875? 

General  Lane:  The  increase  in  1875,  it  will  be  remembered  was 
after  the  lock-out  or,  as  some  of  the  gentlemen  have  called  it,  "  the 
strike."  The  published  price  was  $5.80,  but  there  was  no  coal  coming 
into  the  market  in  January,  1875. 

Mr.  Gowen  (aside) :  Oh,  we  had  plenty  of  coal ;  the  price  of  stove 
was  $5.80. 

Gen.  Lane:  The  gentleman  says  the  price  of  stove  was  $5.80;  and, 
giving  him  all  the  benefit  of  that  showing,  you  will  sec  that  even  then 
he  did  raise  the  price  five  cents  on  the  ton.  You  may  take  any  year 
during  the  existence  of  this  Coal  and  Iron  Company,  and  the  result  is 
the  same.  Take,  for  instance,  the  price  of  coal  delivered  on  board 
vessels  at  Port  Richmond  in  1873 ;  hard  white  ash  coal  (lump) 
was  $4.40. 

Mr.  Gowen :  The  price  varied  with  different  months. 

Gen.  Lane:  Well,  I  have  been  taking  one  particular  month  in  each 
year.  Take  the  same  month  of  the  next  year,  and  the  price  of  hard 
white  ash  (lump)  coal  was  $4.60 — an  appreciation  of  twenty  cents  per 
ton.  Now,  if  these  gentlemen  will  go  on,  year  after  year,  increasing 
the  price  at  the  rate  of  twenty  cents  a  ton  per  year,  but  a  few  years 
will  elapse  before  you  get  it  up  to  such  a  price,  that  the  receipts  from 
these  lands  will  not  only  pay  interest,  but  will  enable  their  owner,  the 
Reading  Railroad  Company,  to  pay  its  dividend.  It  may  by  this 
means  be  able  to  pay  a  dividend  that  will  surprise  and  GRATIFY 
THOSE  ENGLISH  BOND-HOLDERS  who  are  said  to  have  excited 
our  French  friend,  Mr.  Borda. 

Now,  gentlemen,  I  am  speaking  of  facts  that  go  to  show  that  these 
combinations  have  been  carried  out  to  the  letter ;  and,  notwithstanding 


25 

that  we  put  the  other  side  upon  notice  in  advance  as  to  what  we 
proposed  to  establish,  you  have  not  heard  from  them  a  word  of  expla- 
nation or  denial. 

During  the  examination,  being  desirous  of  knowing  something  about 
how  cars  were  distributed  in  the  coal  region,  we  called  a  few  gentlemen 
— truthful  gentlemen,  all  of  them — and  ascertained  from  them  the  fact 
that  when  the  mines  were  averaged  or  rated  at  so  many  cars  each  per 
day,  all  the  empty  cars  that  arrived  within  the  jurisdiction  of  Mr. 
Hesser  were  honestly  and  fairly  distributed.  It  is  not  doubted  by  any 
one  that  every  car  that  went  to  him  was  honestly  and  fairly  distributed, 
and,  gentlemen,  that  was  not  the  point  at  issue.  The  point  at  issue 
was,  how  many  cars  went  to  him.  One  of  the  Articles  in  the  Consti- 
tution and  By-Laws  of  the  Coal  Exchange  provides  that,  when  it 
becomes  necessary,  the  combination  or  six  companies  may  CURTAIL 
OR  STOP  PRODUCTION.  How  are  they  to  "stop  production," 
how  are  they  to  "curtail," — what  is  the  meaning  of  that?  The 
process  consists  in  lessening  the  number  of  cars  available  for  distri- 
bution, by  using  a  certain  proportion  of  them  as  store-houses. 

The  Reading  Railroad  Company,  being  a  common  carrier,  is  obliged 
to  carry  whenever  a  demand  is  made  upon  it  and  it  has  the  cars  or  the 
requisite  carrying  facilities  at  its  command.  There  is  no  alternative; 
it  must  carry  when  it  has  the  means  to  carry.  But  there  is  a  process 
to  which  they  may  resort  by  way  of  avoiding  this  requirement  of  their 
charter,  whenever  it  is  to  their  interest  so  to  do.  Whenever  the 
market  is  not  sufficiently  active  to  take  all  the  coal,  or  their  quota  is 
full,  it  simply  TURNS  ITS  CARS  INTO  STORE-HOUSES.  Then 
when  TEN-THOUSAND  CARS  have  been  converted  into  depositaries 
for  coal, — as  we  have  proven  to  you  they  were — there  is  only  one-half 
the  number  of  cars  to  go  to  the  mines  that  would  otherwise  be  available 
for  the  purpose,  and  consequently  but  one-half  the  number  of  cars  to  be 
distributed.  This  arrangement  is  for  the  mutual  benefit  of  the  Reading 
Railroad  and  its  auxiliary,  the  Reading  Coal  and  Iron  Company.  The 
former  can  at  any  time  it  sees  fit,  turn  the  coal  of  the  Coal  and  Iron 
Company  into  the  cars,  and  the  latter  is  not  going  to  complain  against 
the  Railroad  Company  because  of  a  non-delivery  of  its  coal,  because 
the  two  companies  are  the  same  thing,  the  interests  of  each  are 
identical  and  both  have  the  same  officers.  Thus  the  Railroad 
Company  can  turn  its  cars  into  storehouses  and  put  them  upon  the 
sidings;  and,  when  a  call  for  cars  is  made  the  next  day,  they   can 


26 

reply,  "we  have  only  such  a  number  to  distribute.''  Mr.  Hesser  was 
kiud  enough  to  furnish  us  with  a  list  of  the  calls  that  were  made,  but 
I  cannot  at  this  moment  put  my  hand  upon  it.  It  is  shown,  however, 
that  this  practice  of  turning  the  cars  into  store-houses  continued  until 
in  July  and  August,  1874,  the  percentage  of  distribution  ran  down  as 
low  as  seventeen  per  cent,  j  that  is,  an  operator  ENTITLED  TO 
ONE-HUNDRED  CARS  GOT  SEVENTEEN  per  cent,  of  what 
he  called  for.  Now,  the  answer  to  this  is  perfectly  natural — I  under- 
stand it — that  there  was  no  market  for  the  coal,  that  "  we  could  not 
find  a  market  for  the  coal."  Rut  that  is  what  we  are  now  complaining 
of.  Had  there  been  no  monopoly,  had  there  been  no  combination, 
had  producers  been  permitted  to  sell  at  their  own  prices  and  to  reduce 
the  price  of  coal,  there  would  have  been  a  market  for  the  coal.  That 
is  the  very  thing  we  complain  of— that  THIS  COMBINATION 
HOLDS  UP  THE  PRICE  and  that,  whether  there  is  coal  demanded 
or  coal  not  demanded,  the  price  is  all  the  same. 

Under  the  rule  adopted  by  this  committee,  permitting  the  other  side 
to  examine  in  chief  a  witness  called  by  ourselves,  the  counsel  for  the 
companies  drew  from  Mr.  Rrenizer,  whom  we  had  called,  the  fact  that 
pig  iron  sold  in  1874  for  twenty  dollars  per  ton  less  than  it  did  in  1872 
— that  it  had  depreciated  at  the  rate  of  twenty  dollars  per  ton — and 
he  admits  to  you  at  the  same  time,  that  the  COAL  THAT  GOES 
INTO  the  manufacture  of  that  PIG  IRON  cost  on  an  average  from 
fifty  ceuts  to  one  dollar  per  ton  MORE  IN  1874,  THAN  IT  COST 
IN  1872.  The  proofs  we  have  laid  before  you  are  conclusive  that  in 
the  panic  of  1873,  while  the  profit  in  every  other  industry  had  depre- 
ciated, coal  at  Port  Carbon  (the  place  where  the  price  was  fixed)  was 
higher  in  1873  and  1874,  than  it  was  in  1872.  Perhaps  no  better 
illustration  of  the  power  of  this  coal  combination  could  be  cited  than 
the  fact  that  while  iron  sells  in  1874  for  twenty  dollars  per  ton  less 
than  the  price  realized  for  it  in  1872,  the  cost  of  the  coal  used  in 
its  production  ranges  at  from  fifty  cents  to  one  dollar  per  ton  higher 
than  was  charged  for  it  in  1872. 

Now,  gentlemen,  I  ask  you  can  you  say,  when  called  upon  to  make 
your  report  to  the  legislature  aud  people  of  the  state  of  Pennsylvania, 
that  that  state  of  affairs  could  have  existed  for  one  day  except  through 
a  combination,  such  as  has  been  here  shown  to  have  been  created. 

That  this  combination  did  exist  and  was  carried  out,  you  have  the 
proofs  before  you  in   the  testimony,  but  you  are  not  limited  to  the 


27 

testimony  for  proofs  of  its  existence  and  operations.  You  are  at 
liberty  and  as  legislators  are  bound  to  acquire  from  any  source  of 
information  that  may  be  available  to  you,  aud  from  which  you  may 
obtain  the  facts,  all  the  information  concerning  it  that  is  obtainable. 
If  then  this  combination  in  restraint  of  trade  does  exist,  and  if  the 
law,  as  pronounced  by  the  Supreme  Court  of  the  state,  is  to  prevail  in 
this  case,  I  say  that  you  have  nothing  to  do  but  to  report  the  fact  of 
an  abuse  of  power  on  the  part  of  these  companies. 

We  come  now  to  the  question  of  THE  REMEDY  TO  BE  AP- 
PLIED. Has  the  legislature  the  power  to  act  in  the  premises?  Can 
the  legislature  by  a  law.  give  us  the  remedy?  A  charter  is  a  contract 
between  the  legislature  and  the  incorporators,  and  it  will  not  be  doubted 
by  any  lawyer  that  prior  to  1857,  in  view  of  the  protection  guaranteed 
to  all  such  contracts  by  the  Federal  Constitution,  the  law  in  Pennsylvania 
was  pretty  well  established  that  before  the  legislature  could  take 
action  upon  a  charter,  the  fact  of  an  abuse  or  misuse  thereof  must  be 
found  by  a  court  of  competent  jurisdiction.  But  does  this  require- 
ment for  a  preliminary  investigation  by  the  courts  hold  good  with 
reference  to  the  charter  of  the  Coal  and  Iron  Company  ?  We  say 
that  it  does  not.  I  have  diligently  searched  the  reports  of  the  Com- 
monwealth of  Pennsylvania,  and  I  have  found  no  single  instance  in 
which  it  is  claimed  that  that  requirement  prevails  with  reference  to  a 
charter  obtained  subsequent  to  1857.  I  have  not  been  able  to  find 
even  a  doubt  on  that  question.  I  have  no  doubt  that  with  respect  to 
a  charter  obtained  before  1857,  the  requirement  may  be  enforced. 
The  charter  of  the  Reading  Railroad  Company  was  obtained  in  1833, 
and,  therefore,  I  am  not  prepared  to  say  that  the  legislature  has  the 
power  to  repeal  that  charter.  Many  of  the  supplements  to  the  charter, 
however,  have  been  obtained  since  1857,  and  as  to  these  I  am  of 
the  opinion  that  the  legislature  does  possess  the  POWER  OF 
REPEAL. 

Prior  to  1833,  there  was  but  one  of  the  many  different  kinds  of 
corporations  in  existence  that  was  regarded  as  dangerous,  aud  about 
which  it  was  required  to  throw  restraints,  namely ;  the  banking  corpo- 
rations or  companies  formed  to  carry  on  the  business  of  discounting 
or  banking.  After  1833,  another  class,  the  railroad  corporations 
increased  and  multiplied  in  great  numbers ;  and  the  doctrine  to  which 
I  have  referred  having  been  established  by  the  Courts,  that  a  charter 
was  a  contract  between  the  Commonwealth  and  the  Corporators,  and  as 


2S 

such  was  protected  by  the  Federal  Constitution,  which  provides  that  no 
state  shall  pass  a  law  impairing  the  obligition  of  contracts,  the  people 
withdrew  from  the  legislature  the  power  to  make  an//  corporation  per- 
petual. They  saw  that  these  railroads  could  aggregate  a  money  power 
more  DANGEROUS  TO  THE  LIBERTIES  OF  THE  PEOPLE, 
than  any  corporation  doing  a  banking  or  discounting  business. 

The  Constitution  already  provided  that  no  charter  should  be  granted 
to  a  corporation  with  banking  or  discounting  privileges  for  a  longer 
period  than  twenty  years,  with  power  in  the  legislature  to  alter,  revoke, 
or  annul  the  same.  The  amendment  of  1857  is  sweeping  in  its 
language,  and  includes  the  charters  of  all  corporations,  it  is  as  follows : 

The  legislature  shall  have  the  power  to  ALTER,  REVOKE,  OR 
ANNUL  ANY  CHARTER  of  incorporation  hereafter  con- 
ferred by  any  special  or  general  law,  whenever  in  their  opinion  it  may 
be  injurious  to  the  citizens  of  the  Commonwealth,  in  such  manner, 
however,  that  no  injustice  shall  be  done  to  the  incorporators. 

You  will  see  that  all  corporations,  chartered  since  1857,  are  there- 
fore tenants  at  will ;  at  the  will  of  the  people,  to  be  exercised  by  their 
agent  the  legislature;  "and,  as  the  power  of  modification  and  repeal  is 
thus  made  a  qualifying  part  of  the  grant  of  franchise,  the  exercise  of 
that  power  cannot  of  course  impair  the  obligation  of  the  grant." 

Angell  ife  Ames  on  Corporations,  sec.  767. 

I  claim,  therefore,  gentlemen,  that  after  1857  the  legislature  became 
judges  of  the  question  of  an  abuse  of  chartered  rights  and  that 
whenever  in  their  opinion — and  without  asking  the  opinion  of 
the  Supreme  Court  or  of  any  other  tribunal — the  continuance  of  a 
corporation  will  be  injurious,  though  it  may  not  have  abused  or  mis- 
used its  privileges,  they  have  and  they  should  exercise  the  power  of 
applying  a  remedy  for  the  injury. 

Senator  Rutan  :  The  section  just  read  is  in  the  new  Constitution. 

Gen.  Lane  :  Yes  sir;  it  is  there  without  alteration.  The  convention 
were  of  opinion  that  they  could  not  better  it,  and  left  it  substantially, 
if  not  entirely,  as  it  was. 

The  Charter  of  the  Laurel  Run  Improvement  Company  having  been 
obtained  in  1871,  and  this  amendment  to  the  Constitution  having  been 
made  in  1857,  the  whole  question  is  with  the  legislature;  and,  when- 
ever that  body  is  of  opinion  that  it  is  injurious  to  continue  in  the 
Reading  Railroad  Company  the  power  to  mine  and  sell  coal,  it  may  and 
should  of  right  repeal,  alter,  or  amend  that  power. 


29 

Now,  gentlemen,  right  here  let  me  put  this  question  to  you.  I  know 
that  under  the  new  Constitution  you  could  not  pass  this  charter  of  the 
Coal  and  Iron  Company,  but  supposing  you  were  there  with  the 
powers  you  possessed  in  1871,  and  the  legislature  was  asked  to  pass 
this  charter  as  the  charter  of  the  Philadelphia  and  Reading  Coal  and 
Iron  Company,  to  be  used,  owned  and  controlled  by  the  Philadelphia 
and  Reading  Railroad  Company — would  you  vote  to  pass  it  ?  I  take 
it  that  IT  WOULD  NOT  HAVE  THE  GHOST  OF  A  CHANCE. 
And  I  do  not  believe  it  would  have  had  the  ghost  of  a  chance  of 
passing  in  1871,  if  the  Railroad  Company  had  come  before  you  in  a 
straightforward  way  and  "  faced  the  music,"  so  to  speak.  I  believe 
that  if  this  corporation  had  applied  for  the  passage  of  the  charter  of 
the  Philadelphia  and  Reading  Coal  and  Iron  Company  in  1871,  there 
would  have  been  such  a  storm  of  popular  indignation,  that  no  legisla- 
ture would  have  ever  dared  to  pass  it.  The  best  argument  that  I  can 
make  in  support  of  that  proposition,  is  the  fact  that  they  did  not  go 
there  and  ask  for  a  charter  for  the  Philadelphia  and  Reading  Coal  and 
Iron  Company,  but  for  a  charter  for  the  LAUREL  RUN  IMPROVE- 
MENT COMPANY,  which  name  they  afterwards  had  changed  by  the 
court  under  an  act  of  assembly. 

Senator  Rutan :  I  am  sorry  to  state  that  I  was  there  and  voted  for 
it  with  the  understanding  that  the  Reading  Railroad  Company  was  to 
have  the  charter. 

Mr.  Gowen  :  There  was  a  very  bitter  speech  made  against  it  for  that 
reason  alone. 

Senator  Rutan  :  It  passed  almost  unanimously  in  the  senate. 

•  Gen.  Lane:  Well,  of  course  I  will  not  have  any  controversy  with  the 
senator ;  and,  if  I  had  understood  the  fact  to  be  as  he  has  stated  it,  I 
would  not  have  alluded  to  the  subject. 

Senator  Rutan :  I  only  mentioned  the  fact  because  I  wanted  it  to  be 
known. 

Senator  Waream  (to  Gen.  Lane):  You  do  not  propose  to  ask  him 
whether  he  would  vote  for  it  now  ? 

Gen.  Lane :  I  do  not  propose  to  interrogate  the  senator  at  this  time. 

Senator  Rutan :  There  are  one  or  two  others  here  who  voted  for  the 
bill  with  the  understanding  that  it  was  for  the  benefit  of  the  Reading 
Railroad  Company.  I  will  say  this,  that  AT  THAT  TIME  I 
KNEW   VERY  LITTLE   ABOUT  THE   COAL    BUSINESS. 


30 

Gen.  Lane:  The  senator  says  he  knew  very  little  of  the  coal  business 
at  that  time.  Well,  then  I  may  say  that,  with  the  knowledge  the 
gentleman  now  has,  if  the  application  was  now  made,  he  at  least  would 
not  vote  to  give  to  the  Philadelphia  and  Heading  Railroad  Company  the 
immense  power,  not  for  good  but  for  evil,  that  it  now  holds. 

Senator  Rutan:  I  THINK  THAT  IS  VERY  LIKELY. 

Gen.  Lane:  Then,  gentlemen,  if  you  would  not  give  it  to  them  now, 
why  not  take  it  away?  If  you  would  not  now  grant  the  power,  it  is 
because  you  know  that  that  power  is  hurting  somebody,  THAT  IT  IS 
INJURING  THE  PEOPLE.  The  Constitution  provides  that  no 
injury  shall  be  done  to  the  corporators  and,  I  take  it,  that  for  the  sake 
of  a  few  thousand  dollars  or  because  of  the  investment  of  a  few  hun- 
dred-thousand dollars,  the  legislature  ought  not  to  stand  still  and  see 
any  class  of  people  suffer,  as  we  know  the  people  are  suffering  under 
this  monopoly. 

On  this  question  THE  PEOPLE  HAVE  SPOKEN  in  advance  of 
this  investigation,  the  power  that  makes  and  unmakes  courts  and  legisla- 
tures have  said  in  the  new  Constitution  of  1873: — 

"  No  incorporated  company  doing  the  business  of  a  common  carrier 
shall,  directly  or  indirectly,  prosecute  or  engage  in  mining  or  manu- 
facturing articles  for  transportation  over  its  works  ;"  and  while  there  may 
be  a  doubt  whether  this  new  Constitution  is  the  law  of  corporations 
chartered  before  its  adoption  ;  that  it  speaks  the  will  of  the  people,  that 
it  is  a  letter  of  instruction  to  their  agent  the  legislature,  there  can  be  no 
doubt ;  and  when  it  is  remembered  that  the  most  popular  part  of  the 
new  Constitution  was  the  article  on  railroads,  including  the  section  just 
quoted,  that  that  article  caused  the  people  to  adopt  the  whole  instrument 
by  an  almost  unanimous  vote,  this  letter  of  instruction  will  be  more  im- 
pressive, will  not  be  overlooked  or  neglected. 

I  know  that  the  QUESTION  OF  VESTED  RIGHTS  on  the  part 
of  corporations  is  one  of  a  very  delicate  nature,  and  yet  the  vested  rights 
of  individuals,  your  and  my  vested  rights,  are  ended  within  a  very  few 
years.  We  have  not  the  privilege,  as  has  a  corporation,  of  handing 
down  our  hinds  and  possessions  from  generation  to  generation;  in  the 
second  generation  they  are  divided ;  and  I  hold  that  there  is  no  good 
reason  why  the  lands  of  this  company  should  not  be  settled  by  a  trustee, 
as   are  yours  and  mine. 

We  have  introduced  some  testimony  to  show,  or  at  least  having  a 
tendency  to  show,  the  effect  of  lodging  this  immense  power  in  these  two 


corporations.     It  appears  that  the  state  of  affairs  now  existing  is  very 
different  from  that  which  existed  in  1871-72.     We  called  quite  a  num- 
ber of  the  retail  coal  dealers  to  the  stand  and  showed  you  conclusively 
that  in  1872  they  were  receiving  from  this  mad  all  the  facilities  and 
accommodations  which  their  business  required,  and  that  after  that  they 
were  very  much  annoyed,  one  of  the  principal  sources  of  annoyance 
being  that  they  got  SHORT  WEIGHTS.    Commencing  by  showing  the 
manner  of  weighing  coal  at  the  mines,  we  produced  a  witness  who  testi- 
tified  as  to  how  the  Reading  Railroad  Company  weighed  its  coal  in  the 
scales  at  Frackville.     That  witness  testified  that  the  coal  passed  over  the 
scales  at  from  five  to  ten  miles  an  hour,  that  the  weigh-master  took  the 
weight  while  it  was  in  motion,  and  that  he  had  frequently  seen  cars  consigned 
to  different  consignees  weighed  at  the  same  time.    He  stated  that  he  saw 
his  own  coal  on  the  scales  being  weighed  while  coal  for  other  consignees 
was  on  the  scales;    that  when  his  coal  arrived  at  his  yard  in  Philadel- 
phia, it  was  light.      You  will  bear  in  mind,  gentlemen,  that  that  was  the 
only  witness  on  the  point ;   and  it  was  the  easiest  matter  in  the  world  to 
contradict  that  witness  if  what  he  said  was  not   true.      But  when  the 
weigh-master  at  Frackville  came  upon  the  stand,  there  was  nut  a  single 
question  asked  him  by  the   other  side,  other  than  questions  such   as 
would  be  asked  of  any  school-boy.    "  Did'nt  I  tell  you  to  do  your  duty?  " 
"Yes."     "Did'nt  you  do  your  duty?"     "Yes."     " If  I  had  told  you  to 
do  anything  wrong,  would  you  have  dune  it?"     "No."     "Did  I  tell 
you  to  do   anything  wrong?"     "No."     Of  course   I   do  not   wish   to 
speak  disrespectfully  of  the  counsel  fur  the  companies,  and  will  be  un- 
derstood simply  as   criticising  the  style  of  the  questions  put  by  him. 
We  introduced  other  witnesses,  however,   to  show  that  in  1873-7-4, 
the  weights    were  materially    short.      We   introduced    witnesses,    who 
stated  that  they    had    been   driven    out    of    the    business    on    account 
of  short  weights.      We  proved  by  all  of  the  witnesses  that  the  weights 
were  uniformly  short  and,  by  one  or  two  witnesses,  that  the  weights 
ran  ten  per  cent,  short.     We  have  introduced  testimony  showing  that 
short    weights  were  uniformly   given  by  this  Railroad  Company   since 
1872.     If  the  committee  had  given  me  the  time,   I  would  have  gone 
over  the  testimony  and  shown  you  the  extent  and  character  of  these 
shortages,  as  testified  to  by  the  witnesses,  but,  under  the  spur  which 
you  have  been  applying  to  me,  I  have  not  had  the  time  that  would 
have  been   requisite  to  enable  me  to  do  this,   and  am  therefore  obliged 
to    state    the  testimony    merely    from    my    general    recollection    of    it. 


32 

This  matter  of  short  weights  constituted  a  grievance,  an  annoyance 
and  an  injury;  and  the  object  in  presenting  the  testimony  in  regard 
to  it  was  principally  to  show  you  the  manner  in  which  the  Beading 
Railroad  Company  could  exercise  the  power  it  possessed  over  the 
business  of  the  coal  trade.  In  almost  every  case  where  short  weights 
were  found,  the  claim  of  short  weights  was  made ;  and,  as  I  remember 
the  testimony,  in  no  instance  did  the  matter  receive  from  the  Railroad 
Company  any  notice  other  than  a  letter  that  they  would  look  into  the 
matter,  would  examine  it  and  would  see  about  it.  They  would  trace  it 
down  so  far  as  to  be  able  to  say  that  they  had  examined  the  cars  and 
had  not  found  them  broken,  or  that  the  bottoms  were  not  out  of  them, 
and  that  was  the  end  of  it.  An  affidavit  was  sent  to  the  company  that 
we  had  bought  the  coal  and  found  it  short  and,  as  you  remember,  gentle- 
men, the  affidavit  in  that  case  was  lost,  and  that  was  the  end  of  it. 
These  short- weights  continued  during  the  years  1873  and  1874.  Every 
time  that  a  dealer  could  find  the  opportunity,  whenever  he  found  his 
bins  empty,  he  would  weigh  the  coal ;  the  result  showing  uniformly  in 
every  instance  a  shortage.  He  would  then  make  complaint  to  the  Rail- 
road Company  as  a  common  carrier,  and  the  matter  would  end  without 
any  particular  attention  being  paid  to  it;  at  all  events,  nothing  would 
come  of  it.  Rut,  finally,  Mr.  Hallowell,  one  of  the  witnesses,  who  was 
directed  to  have  his  car  re-weighed,  took  it  out  and  ran  it  over  a  car 
scale;  and  it  weighed  more  the  second  time  than  it  weighed  before. 
Now  Mr.  Hallowell  again  re-weighed  the  coal  and  found  that  the  car 
was  not  full,  that  it  was  short  some  two  tons,  as  I  now  remember  the 
testimony.     He  still  made  complaint,  but  no  allowance  was  made. 

Now,  gentlemen,  this  matter  of  short  weights  appears  to  you  to  be  a  very 
small  matter,  but  it  was  a  very  serious  matter  to  some  of  these  men  who 
retailed  coal.  You  will  remember  that  many  of  these  men  were  very 
poor;  they  were  small  dealers,  with  1500  or  2000  tons  a  year,  men 
who  had  other  business  during  part  of  the  year  and  who,  during  the 
winter  time,  sought  to  earn  a  living  for  themselves  and  their  families  by 
retailing  coal,  but  were  driven  out  of  business  by  short-weights.  That, 
however,  was  not  the  question  with  us.  The  question  with  us  and  the 
point  at  issue  was,  how  could  the  Reading  Railroad  Company  afford  to 
treat  its  customers  in  this  way?  It  could  not  afford  to  do  it  in  1871 ;  it 
DID  NOT  ATTEMPT  TO  DO  IT  IN  1871.  Here  was  the  COM- 
PETITION of  the  Schuylkill  Canal,  the  Lehigh  Valley  and  the  North 
Pennsylvania  Railroads;    and  if  systematic  complaints  of  that  kind  had 


33 

been  made  against  the  Reading  Railroad  as  a  common  carrier,  it  would 
have  lost  its  tonnage  and  lost  the  means  of  paying  its  expenses  and  its 
dividends.  To  guard  against  the  possibility  of  any  complaints  of  that 
kind,  to  take  that  care  of  its  customers  that  would  result  in  giving  to 
it  the  greatest  possible  amount  of  tonnage,  to  eucourage  them,  as  Mr. 
Rothermel  expressed  it,  in  "  scratching  around  to  hunt  up  more  tonnage 
for  it,"  it  put  on  the  five  per  cent. ;  and  throughout  the  existence  of 
that  five  per  cent,  arrangement  there  was  no  complaint,  and  there  could 
be  no  complaint.  But  in  1873  the  whole  condition  of  things  was 
changed;  for  then,  if  these  gentlemen  did  withdraw  their  custom,  the 
Coal  and  Iron  Company,  this  auxiliary  company,  would  furnish  tonnage 
for  the  railroad  company;  it  would  get  the  same  amount  of  tonnage 
that  the  railroad  would  get  if  these  gentlemen  were  to  continue  to 
"scratch  around"  to  get  tonnage  for  it,  In  addition  to  that,  the  railroad 
had  the  opportunity  of  selling  its  own  coal.  That  was  the  cause  of  the 
complaint,  that  by  this  franchise,  this  power  given  to  it  by  the  common- 
wealth of  Pennsylvania,  it  was  put  in  a  position  not  only  to  strike  down 
the  middlemen,  and  hold  them  down  when  it  got  them  down,  but  to 
strike  down  the  retail  dealer  and  HOLD  HIM  DOWN  WHEN  IT 
GOT  HIM  DOWN.  Now,  you  take  away  this  auxiliary  company, 
and  the  Reading  Railroad  Company  is  bound  to  hunt  for  tonnage,  to 
take  care  of  its  customers,  and  to  have  all  these  men  "scratching 
around"  and  getting  tonnage  for  it ;  then  it  will  protect  its  customers.  Well, 
now,  gentlemen,  what  was  the  answer  made  to  this  complaint?  I  ask 
you  to  pay  particular  attention  to  this.  The  last  application  that  I  now 
have  in  my  mind  that  was  made  to  have  this  matter  of  short  weights 
rectified,  was  made  to  J.  Lowrie  Bell,  the  General  Freight  Agent,  who 
was  a  witness  and  testified  before  you.  He  answered  in  this  language 
(it  is  in  the  testimony)  :  "  We  do  not  think  a  fair  test  can  be  made  other 
than  by  passing  the  car  with  contents  OVER  A  TRACK  SCALE, 
and  on  that  account  would  be  unwilling  to  accept  the  weights  ascer- 
tained by  hauling  in  carts  from  car  to  wagon  scales."  That  was  the 
answer,  gentlemen,  that. you  cannot  make  a  fair  test  by  weighing  coal 
which  has  been  hauled  from  the  car  to  the  scale,  that  any  test  so  made 
is  uufair.  The  only  way  to  do  is  to  take  the  coal  while  in  bulk  and 
pass  it  over  the  scales,  and  any  other  way  is  unfair,  says  Mr.  Bell. 
And  after  they  had  produced  that  statement  in  evidence,  it  is  marvelous 
that  they  resorted  to  any  other  way  of  testing  weight  than  by  running 
the  cart,  while  the  coal  was  in  bulk,  over  the  scale  and  weighing  it. 


34 

But,  gentlemen,  did  they  resort  to  this  "fair  test"  to  which  they  de- 
manded we  should  subject  them?  Why  the  Act  of  1871,  providing  for 
the  weighing  of  coal,  gave  to  this  Reading  Railroad,  this  great  corpora- 
tion, with  its  millions  and  millions  of  dollars,  with  its  POWER  TO 
CRUSH  ANY  MAN  whom  it  desires  to  crush,  and  there  is  no  doubt, 
gentlemen,  but  that  it  can  crush  any  one  man  when  it  tries,  it  gave  this 
corporation  the  power  to  go  to  the  coal  yard  of  an  individual  and  buy 
a  ton  of  coal  and  then  say,  "now,  Mr.  Hancock,  that  coal  is  mine;  I 
am  going  to  take  it  to  a  scale  and  see  if  it  is  full  weight,"  THEY 
DID  NOT  WEIGH  IT  IN  BULK  as  their  own  coal  had  been 
weighed,  but  they  employed  men  for  a  specific  purpose.  What  was 
that  purpose?  It  was  to  find  short  weights.  They  paid  these  men  for 
this  purpose,  and  paid  them  for  all  the  coal  that  went  into  their  cellars. 
Now  you  saw  those  men,  and  do  you  suppose  any  of  them  would  return 
to  the  Reading  Railroad  Company  with  the  report  that  they  did  not 
find  any  short  weights,  in  other  words,  that  the  railroad  company  only 
were  the  scoundrels?  Not  a  bit  of  it.  They  performed  their  duty  well. 
And  a  singular  coincidence  in  connection  with  this  testimony  was  that 
THE  AMOUNT  OF  SHORTAGE  IN  EACH  INSTANCE  COR- 
RESPONDED WITH  THE  DAMAGING  EFFECT  WITH 
WHICH  THE  DEALER  HAD  TESTIFIED  AGAINST  THE 
RAILROAD.  Where  a  witness  had  not  been  very  damaging  to  the 
company,  the  long  weights  loomed  up,  but  those  of  the  witnesses  who 
testified  with  the  greatest  effect  against  the  railroad,  were  the  ones  who 
caught  it  the  worst  in  return.  Our  friend  Spooner  fared  the  worst, 
because  he  had  been  the  hardest  upon  the  company ;  he  was  taken  in 
hand  by  a  detective  in  person,  his  case  could  not  be  safely  turned 
over  to  one  of  the  hired  emissaries.  I  say  that  the  men  who 
did  this  work  were  employed  for  a  specific  purpose,  that  of  finding 
short  weights.  They  were  either  employees  of  the  railroad,  or  persons 
employed  by  detectives,  or  were  themselves  detectives;  and  when 
I  have  said  that,  I  have  said  all  that  I  propose  to  say  on  that  matter. 
My  object  is  mainly  to  call  your  attention  to  the  fact  that  the  test  which 
they  applied  was  not  that  fair  test  of  weighing  in  bulk  spoken  of  by 
J.  Lowrie  Bell !  We  have  proved  by  the  witnesses  that  this  was  a  light 
coal,  that  is,  that  it  is  what  is  known  as  the  Lykens  Valley  Coal,  a  coal 
that  is  much  lighter  in  weight  than  the  Lehigh  Coal,  and  consequently 
of  much  larger  bulk.  In  passing  some  eight  or  nine  squares  from  the 
place  of  purchase  to  the  place  of  delivery,  it  is  probable  that   a  very 


35 

considerable  portion  of  it  would  fall  off  the  cart.  After  being  conveyed 
to  a  certain  point,  it  was  dumped  upon  the  sidewalk  and  finally  gathered 
up  and  deposited  in  a  cellar,  where  it  lay  until  gathered  up  into  bags  to 
be  weighed  by  these  gentlemen  (undoubtedly  they  discharged  their 
duty  while  watching  it),  who  WERE  EMPLOYED  TO  FIND 
SHORT  WEIGHT.  Mr.  Cheesman  the  weigher,  says  he  weighed  the 
Cual  in  every  instance,  but  the  fact  soon  became  apparent  that  this  man 
whom  you  expected  to  see  with  his  parchment  spread  out  before  you, 
was  simply  employed  to  do  his  work ;  and  when  we  found  one  or  two 
men  who  were  perfectly  honest  and  who  had  not  been  employed  to  do 
this  work— Mr.  Tully,  of  Gerinantowo,  was  I  think  the  name  of  one  of 
tllellJ — we  find  a  different  version  of  the  story.  Mr.  Tully  says,  that 
after  the  weigher  left  he  (Tully)  went  out  and  picked  up  in  the 
cellar,  where  the  coal  had  lain,  two  scuttlesfull  of  coal  notwithstanding 
Mr.  Cheesman  certified  and  testified  that  all  the  coal  was  weighed. 

Now,  nut  only  was  the  test  established  by  the  railroad  AN  UNFAIR 
TEST,  but  it  failed  to  prove  anything.  It  was  not  introduced  to  con- 
tradict our  testimony;  it  did  not  contradict  it;  if  anything,  IT  ESTAB- 
LISHED OUR  TESTIMONY.  Of  course  if  the  scales  of  the 
retailers  weighed  light,  the  tendency  of  that  fact  was  to  increase  the 
light  weight  of  the  railroad ;  every  one  can  see  that.  If  a  four  ton  car 
is  delivered  into  the  yard,  and  it  falls  short  half  a  ton  by  scales  which 
give  light  weight,  and  then  the  balance  is  weighed  out  by  scales  which 
give  short  weight,  this  only  serves  to  increase  the  short  weights  of  the 
Reading  Railroad  Company.  It  does  not  disprove  the  existence  of,  but 
ouly  increases  short  weights. 

But  are  the  scales  of  the  railroad  correct — have  they  that  element  of 
certainty  in  measurement  from  which  there  can  be  no  escape?  Are  the 
weighte  of  the  man  who  goes  around  every  month  and  tests  the  scales 
always  correct?  Why,  we  can  refer  to  the  weights  produced  by  the 
gentlemen  themselves,  and  prove  conclusively  that  they  are  not  correct. 
Take  the  exhibit  made  by  the  company  of  the  amount  of  coal  that  was 
received  in  the  company's  yard,  at  Ninth  and  Berks  streets.  They  state 
that  they  received  80,912  tons  and  had  an  excess  of  103  tons.  They 
received  at  their  Germantown  yard  only  18,232  tons  and  had  an  excess 
of  8-10  tons.  At  the  Ninth  and  Berks  streets  yard,  the  excess  was  less 
than  &'s  of  one  per  cent.  The  excess  at  the  Germantown  yard  was 
four  and  ,60s  per  cent.  Had  the  excess  at  the  Ninth  and  Berks  streets 
yard,  been  as  large  as  it  was  at  the  other  yards,  it  would  have  been 


36 

3,702  tons  instead  of  103  tons,  and  if  the  weights  at  the  mines  were 
correct,  the  people  of  Germantown  paid  for  841)  tons  of  coal  that  they 
did  not  get.  They  make  mistakes,  and  that  faet  is  conclusive  that  their 
scales  are  not  as  accurate  as  they  have  attempted  to  show  you  that  they 
arc.  They  show  you  that  their  shippers  at  Richmond  have  received 
more  than  they  shipped,  but  the  weights  are  theirs  in  both  instances; 
and  the  fact  that  they  sent  out  more  than  they  received,  is  an  evidence 
that  Til  KIR  SCALES  DO  NOT  WEIGH  ACCURATELY,  but 
what  was  the  object  on  the  part  of  these  corporations  in  introducing  this 
evidence?  Certainly  not  to  disprove  any  evidence  against  them;  it  had 
no  such  tendency.  The  motive  is  apparent,  the  object  was  to  satisfy 
you  that  there  is  no  safety  to  the  people  but  in  turning  over  all 
this  business  to  corporations ;  that  there  is  no  power  in  the  legislature 
to  make  laws ;  no  personal  integrity  in  the  people ;  no  public  sentiment 
sufficiently  strong  to  guard  the  people,  to  protect  one  class  of  the  com- 
munity from  the  other  class  of  the  community  ;  but  turn  all  this  business 
over  to  corporations,  and  they  will  do  justice  and  deal  fairly.  When  in 
the  history  of  the  world  was  power  obtained  by  any  other  argument? 
IT  HAS  EVER  BEEN  THE  PLEA  TO  OBTAIN  POWER  FOR 
THE  FEW,  that  the  people  could  not  take  care  of  themselves ;  that 
power  in  the  leaders  was  necessary  for  the  care  and  protection  of  the 
people.  Are  you  ready  to  make  this  concession?  Are  you  ready  to 
report  THAT  THE  PEOPLE  CANNOT  BE  TRUSTED?  Are 
you  ready  to  say  that  this  government  of  the  people,  by  the  people,  for 
the  people,  is  a  mistake;  and  that  by  placing  power  in  the  hands  of  one 
or  six  men,  the  happiness  and  prosperity  of  the  community  will  be 
more  secure? 

Now,  gentlemen,  there  is  one  other  matter  to  which  we  call  your 
attention;  and  that  is  to  the  DETENTION  OF  CARS.  We  showed 
you  that  the  witnesses  whom  we  produced,  representative  men  of  their 
class,  were  greatly  annoyed  by  the  detention  of  their  cars,  and  that. 
WHILE  THE  READING  COAL  AND  IRON  COMPANY  WERE 
RECEIVING-  THEIR  COAL  REGULARLY  AND  CONSTANT- 
LY, THE  RETAIL  DEALERS  AND  FACTORS  WERE  NOT 
RECEIVING-  THEIRS;  that  their  yards  were  entirely  empty;  that 
they  could  not  get  coal,  and  that  they  were  greatly  annoyed.  Now, 
gentlemen,  in  answer  to  that,  the  Coal  and  Iron  Company  say,  'why 
we  keep  books;  we  have  the  advantage  of  you;  you  did  not  keep  a 
minute  of  this  thing,  but  we  did ;  we  have  you  now  and  we  will  bring 


37 

you  down."  They  then  go  over  a  period  of  two  years  and  then  sum  up 
the  total  of  all  the  ears  that  the  consignee  received  in  that  period  of 
two  years,  and  then  they  sum  up  the  total  of  hours  that  those  cars  were 
out,  and  they  strike  a  balance  and  show  an  average.  But,  gentlemen, 
that  does  not  answer  the  charge.  Our  complaint  was  that  WHEN 
WE  W ANTED  CARS  WE  COULD  NOT  GET  THEM,  and  this 
they  have  not  attempted  to  answer.  I  have  run  over  the  paper  pre- 
sented by  the  company,  for  the  purpose  of  showing  an  average  of  one 
day  and  thirteen  hours,  and  I  will  give  you,  just  as  presented  by  the 
company,  the  figures  which  show  this  complaint  to  have  been  well 
founded. 

You  will  remember  the  testimony  was.  that  if  the  cars  were  loaded, 
for  instance,  on  to-day,  they  ought  to  be  delivered  on  to-morrow  or 
within  twenty-four  hours;  but.  in  citing  these  periods  of  detention.  I 
will  confine  myself  to  those  only  which  exceed  five  days  in  length. 

Senator  Rutan:   Forty-eight  hours,  at  the  outside,  was  the  limit. 

Gen.  Lane:  Yes;  the  limit  was  forty -eight  hours,  at  the  outside. 

Branson  &  Brother  had  26  cars  that  were  detained  from  five  to 
eleven  days. 

J.  B.  Hancock  &  Co.,   2(3  cars,  from  five  to  seventeen  days  out. 

Mr.  Conrad,  57      "        "        "     "    twenty-five  "       " 

Mr.  Spooner,  49      "        "•      "     "    twenty-six    "       " 

Mr.  Fleck,  14      "        "        "     "    ten 

Mr.  Kepner,  61      "        "        "     "   twenty-six   "       " 

You  will  remember,  gentlemen,  that  in  passing  over  the  road,  we  took 
some  note  of  the  location  of  these  yards.  Mr.  Kepners  yard  is  above 
that  of  the  Coal  and  Iron  Company,  and  therefore  that  blockade  on 
Ninth  street,  of  which  he  spoke,  could  not  affect  his  yard,  yet  he  had 
sixty-one  cars  out  from  five  to  twenty-six  days.  And  you  will  bear  in 
mind  here,  that  these  complaints  were  made  at  times  when  these  dealers 
had  no  coal,  and  when  the  Reading  Coal  and  Iron  Company,  whose 
yards  were  located  in  their  immediate  vicinity,  had  all  the  coal  they 
wanted  and  were  receiving  continually. 

Wagner,  Conrad  &  Singerly  had  sixty  cars  out  from  five  to  thirty- 
three  days.  Roberts  &  Brother,  whose  yard  was  at  Geraiantown  and 
whose  cars  did  not  come  over  the  Ninth  street  road  at  all,  had  twenty- 
five  cars  out  from  five  to  thirty-one  days.  Chapman  &  Gaskill  had 
sixty-two  cars  out  from  five  to  twenty-six  days.  Mr.  Hallowell  had 
twenty-nine  cars  out  from  five  to  twenty-five  days. 


38 

Now,  gentlemen  of  the  committee,  suppose  that  one  of  these  coal 
dealers  had  entered  into  a  contract  with  one  of  you.  the  requisite  security 
being  given,  for  supplying  you  with  coal  upon  certain  terms,  and  that 
after  having  during  the  summer  months  supplied  you  promptly,  and 
perhaps  within  an  hour  after  your  calling  upon  him.  he  abruptly  stops 
delivering  you  coal  in  the  month  of  January.  1 875. 

You  order  your  coal  as  usual,  and  he  promises  to  attend  to  it:  you  go 
to  him  again,  and  tell  him  that  your  bins  are  empty  and  you  must  have 
coal;  he  answers:  I  will  look  after  it.  You  go  again  and  again,  and 
get  the  same  answer;  you  wait  on  and  suffer  on.  you  remember  how 
promptly  your  coal  was  delivered  in  August,  and  know  that  you  and 
your  family  are  freezing  in  winter ;  the  cold  month  of  January  passes 
and  you  get  no  relief;  you  go  to  him,  conscious  of  an  injury,  you 
denounce  him  as  an  impostor  and  a  cheat,  when  all  at  once  he  turns 
upon  you  to  convince  you  that  he  is  the  injured  individual;  that  he  has 
kept  the  date  of  each  of  your  orders,  and  the  number  of  tons  you 
ordered;  he  has  prepared  AN  AVERAGE,  and  during  the  whole  year 
your  coal  was  delivered  in  an  average  of  twenty-four  hours,  and  then, 
oentlemen.  when  von  turn  round  and  find  that  this  man  controls  all  the 
avenues,  and  that  all  your  coal  must  come  from  him,  that  from  his 
power  there  is  no  escape,  you  must  feel  that  it  is  dangerous  to  place  such 
great  power  in  the  hands  of  one  man,  and  that  that  power  has  been 
grossly  abused. 

As  ridiculous  as  this  may  appear,  such  is  the  answer  made  by  these 
corporations ;  they  show  you  that  for  two  years  the  coal  of  these  gentle- 
men has  been  detained  on  an  AVERAGE  one  day  and  thirteen  hours. 

But  would  they  dare  to  give  such  an  answer  if  they  were  common 
carriers  alone?  the  question  is  not  one  of  average:  it  is  whether  this 
company  is  doing  its  duty,  or  whether  it  is  abusing  its  franchises  and 
refusing  to  do  its  duty ;  whether  it  is  taking  care  of  the  public,  or 
whether  it  is  abusing  the  public. 

Now,  gentlemen,  during  this  investigation,  we  passed  together  over 
this  southern  coal  field,  the  Schuylkill  region ;  and  after  we  had  gone 
over  it  we  knew  a  great  deal  more  about  mining  coal  than  we  knew 
before  we  visited  it;  but  I  have  no  doubt  that  when  you  saw  the  men 
of  that  region  engaged  at  their  daily  avocations  as  miners;  when  you 
saw  them  going  down  and  coming  up  from  their  work  in  the  mines,  the 
thought  suggested  itself  to  your  minds — WHAT  WILL  THESE 
MEN   BE   TEN,   FIFTEEN    OR   TWENTY   YEARS   HENCE? 


39 

when  we  stood  by  the  side  of  the  breaker  and  saw  the  little  boy  picking 
out  the  slate,  we  asked  ourselves,  "  what  effect  upon  these  men  and  these 
boys  will  the  policy  now  pursued  have,  when  all  these  lands  and  mines 
are  owned  and  controlled  by  corporations;  how  will  it  affect  these  men? 
the  pride  of  every  American  to  own  his  home  cannot  stimulate  them ; 
the  hope  of  some  day  owning  a  mine  has  been  blasted  by  this  grant  of 
franchise,  which  enabled  a  corporation  to  take  all  and  hold  it  forever; 
doomed  all  their  lives  to  be  employees,  THE  DOORS  OF  PROMO- 
TION ARE  FOREVER  CLOSED  to  all  these  twenty,  thirty,  or  forty- 
thousand  men,  and  to  the  thousands  that  will  come  after  them ;  a 
condition  of  things  that  you,  gentlemen,  as  law-givers  cannot  contemplate 
with  other  than  feelings  of  alarm;  who  will  be  benefited,  certainly  not 
the  people.  These  grants  of  franchise  to  these  corporations  given  to 
them  for  public  good  are  to  be  used  to  crush  the  people ;  the  bond-holder 
may  get  his  dividend,  but  the  people  must  suffer  that  he  may  get  it. 
THE  DEAD  WEIGHT  OF  POWER  HAS  OPPRESSED  AND 
DESTROYED  EVERY  INDIVIDUAL  AMBITION,  and  though 
this  power  may  produce  some  specific  astonishing  effects,  it  saps  the  life ; 
it  may  build  ships  and  roail  roads,  but  it  will  not  produce  healthy,  happy 
homes,  or  contented  people. 

While  the  power  is  in  the  rail  road  to  fix  the  charge  for  freights  at 
any  price  it  desires  ,no  limit  but  the  will  of  the  railroad  company, — 
1  L\  F.  Smith,  310-15  P.  F.  Smith,  210-242— and  the  power  is  m 
the  Coal  and  Iron  Company  to  fix  the  price  of  coal  at  Port  Carbon  at 
any  price  it  desires,  these  two  corporations  can  compel  any  private 
operator  to  accept  the  terms  or  adopt  the  plans  of  the  combination ;  they 
may  put  the  freight  up  to  six  dollars  or  more  a  ton,  and  put  the  coal 
down  to  one  dollar  and  a  half  or  less  at  Port  Carbon,  and  while  COM- 
PELLING EVERY  OTHER  OPERATOR  TO  STOP,  or  go  on  at  a 
loss,  these  two  corporations  can  work  at  a  profit;  what  they  lose  on  coal, 
they  can  more  than  make  up  on  freights ;  they  can  fix  the  prices  to  suit 
themselves  and  the  people  are  powerless;  THE  COMBINATIONS 
HAArE  DESTROYED  COMPETITION.  Such  power  in  a  corpora- 
tion is  a  reproach  to  the  State;  to  give  such  power  is  an  ASSAULT 
UPON  THE  LIBERTIES  OF  THE  PEOPLE!  to  say  that  it  can 
continue,  that  the  people  will,  and  must  submit,  is  a  reflection  upon  their 
intelligence,  and  a  defiance  of  their'power. 

Now,  gentlemen,  in  consequence  of  the  very  short  time  you  have 
allowed  the  counsel  in  this  case,  having  brought  us  here  within  a  very  few 


40 

days  after  the  close  of  the  testimony  and  without  our  having  an  oppor- 
tunity to  see  the  testimony,  I  have  gone  over  the  matter  as  rapidly 
as  was  possible,  and,  to  my  mind,  very  unsatisfactorily.  Notwithstanding 
this,  I  have  no  doubt,  gentlemen,  that  I  have  demonstrated  to  your 
satisfaction  that  this  company  has  not  the  legal  power  to  do  what  it 
is  doing;  that  the  charter  upon  which  it  has  acted  is  invalid,  and  that, 
if  valid,  it  has  abused  and  misused  its  franchise,  and  that  the  power  to 
apply  the  remedy  rests  with  you  independently  of  the  courts. 

Senator  Rutan :  The  remedy,  as  I  understand  you,  is  to  repeal  the 
charter  of  the  Coal  and  Iron  Company? 

Gen.  Lane:  Yes,  sir;  if  the  legislature  desires  to  repeal  the  charter, 
the  right  to  exercise  the  repealing  power  rests  entirely  with  that  body. 
I  hold  that  it  should  at  once  APPLY  THE  REMEDY  RY  REPEAL- 
ING THE  CHARTER  OF  THE  PHILADELPHIA  AND 
READING  COAL  AND  IRON  COMPANY.  AND  AUTHORI- 
ZING THE  GOVERNOR  TO  APPOINT  TRUSTEES  TO  DIS- 
TRIBUTE THE  ESTATE. 

Senator  Rutan :  You  do  not  mean  the  charter  of  the  Railroad  Co.  ? 

Gen.  Lane:  I  do  not  mean  the  charter  of  the  Railroad  Co.;  we  will 
ask  the  Court  to  attend  to  that. 


ARGUMENT 


SILAS  W.  PETTIT,  Esq., 


OF    PHILADELPHIA, 


BEFORE    THE 


Joint  Committee  of  the  Legislature  of  Pennsylvania,  ap- 
pointed to  inquire  into  the  affairs  of  the  Philadelphia 
and  Reading  Coal  and  Iron  Company  and  the 
Philadelphia  and  Reading  Railroad  Com- 
pany, on  July  31st,  1875, 

IN  REPLY  TO  THE  ARGUMENT  OF 

FRANKLIN    B.  GOWEN,  Esq., 

President  of  said  Companies. 


REPORTED     KY 


JOSEPH    I.    GILBERT. 


Mr.  Chairman  and  Gentlemen  of  the  Committee  : — I 
congratulate  you  upon  now  arriving  at  almost  the  finality  of  the  long 
investigation  which  you  have  made  and  which,  since  the  adjournment 
of  the  Legislature,  has  occupied  so  much  of  your  time  at  such  a 
serious  inconvenience  to  yourselves. 

The  gentleman  representing  the  Railroad  Company  and  the  Coal  and 
Iron  Company  has  well  divided  the  case  into  two  heads — first,  a  history 
or  general  view  of  tin  Philadelphia  and  Reading  Railroad  Company, 
on  the  one  hand;  and  secondly,  the  questions  raised  by  the  testimony 
which  we  have  presented  before  you,  on  the  other.  Under  the  first 
head,  the  gentleman  was  peculiarly  and  fully  qualified  to  speak.  He 
not  only  had  the  knowledge  to  be  derived  from  the  testimony  and  the 
exhibits,  but  he  was  thoroughly  acquainted  with  the  whole  subject 
from  having  for  fifteen  years  made  this  particular  pursuit  of  the 
mining,  selling  and  transporting  of  coal  a  matter  of  constant  study. 

With  reference  to  the  Philadelphia  and  Reading  Railroad  Company, 
which  you,  gentlemen,  were  appointed  to  investigate,  we  would  say,  in 
commencing  this  argument,  that  at  no  time  since  this  investigation 
began  was  there,  on  our  part,  any  thought  of  attacking  the  personal 
or  official  integrity  of  any  officer  of  that  company.  On  the  contrary, 
so  far  as  that  is  concerned,  we  will  bear  cheerful  testimony  to  the  fact 
that  everything  that  has  been  so  well  and  eloquently  said  on  that 
score  by  my  friend  on  the  other  side  is  true,  and  perhaps  even  less 
than  true. 

The  Philadelphia  and  Heading  Railroad  Company  was  chartered  in 
1833,  and  in  1838,  by  virtue  of  an  amendment  to  its  charter  its  road 
was  extended,  and  it  was  authorized  to  lay  its  tracks  to  the  borough  of 
Pottsville,  to  which  point  it  was  opened  for  business'in  1842,  having 
then  a  length  of  ninety-three  miles.  THIS  CORPORATION,  from 
that  modest  commencement,  has  gradually  extended  itself,  not,  as  I 
take  it,  by  the  building  of  lines  of  railway,  but  BY  THE  ABSORP- 
TION OF  LINES  OF  RAILWAY  BUILT  BY  OTHERS;  indi- 
viduals and  smaller  companies;  until  now,  FROM  93  MILES,  it 
HAS  GROWN  TO  1,360  MILES,  or  more  than  fourteen  times  its 
original  length — 466  miles  of  which,  or  five  times  the  length  for 
which  it  was  originally  chartered,  are  in  the  Schuylkill  coal 
region  alone. 


44 

A  list  of  the  companies  absorbed  by  it  may  in  this  connection  be 
interesting.  I  quote  from  the  recitals  in  the  last  general  mortgage  for 
sixty-millions  of  dollars,  made  by  the  Railroad  Company  on  the  1st 
of  July,  1874. 

First  they  recite  their  main  line  from  its  termini  at  Port  Richmond, 
to  its  junction  with  the  Mount  Carbon  Railroad  at  a  point  which  is 
one  mile  or  one  and  one-half  miles  on  this  side  of  Pottsville.  Then 
follow  the  Lebanon  Valley  Branch ;  the  Lebanon  and  Tremont 
Branch ;  the  Mahanoy  and  Shamokin  Branch ;  the  Mount  Carbon 
Branch;  the  Schuylkill  and  Susquehanna  Branch;  the  Port  Kennedy 
and  West  Reading  Branch ;  the  Philadelphia,  Germantown  and  Norris- 
town  Branch ;  the  Chestnut  Hill  Railroad;  the  Plymouth  Railroad; 
the  Perkiomen  and  Colebrookdale  Railroad;  the  East  Pennsylvania 
Railroad ;  the  East  Mahanoy  Railroad  and  Little  Schuylkill  Naviga- 
tion Railroad  and  Coal  Company  ;  the  Schuylkill  Valley  Navigation 
and  Railroad  Compauy  ;  the  Mill  Creek  and  Mine  Hill  Navigation  and 
Railroad  Company ;  the  Mine  Hill  and  Schuylkill  Haven  Railroad  ; 
the  Canal  and  Navigation  Works  of  the  President  and  Managers,  of 
the  Schuylkill  Navigation  Company,  the  Susquehauna  Canal  Company, 
and  the  Catawissa  Railroad  ; — all  these  together  comprising  l^GOfo 
miles  of  single  track  railroad,  besides  the  two  canals,  and  besides  the 
line  of  steam  colliers. 

Therefore,  gentlemen,  this  corporation  which  is  so  modest  and  un- 
assuming, this  corporation  which  desires  simply  to  be  let  alone  seems, 
by  the  very  testimony  before  you,  to  have  extended  itself,  not  by 
building  roads,  but  by  absorbing  those  roads  which  had  been  built  by 
other  people;  this  "Falcon,  tow'ring  in  her  pride  of  place,"  about 
which  we  have  been  told,  seems  to  be  a  most  voracious  bird  and,  on 
closer  inspection,  I  think  you  will  find  it  to  be  no  falcon  at  all — but  a 
cormorant.  ; 

Now,  sirs,  having  thus  extended  themselves,  having  absorbed  all  the 
railroads  and  canals  within  their  reach ;  having  acquired  all  this 
power,  you  would  think  they  had  enough.  But,  says  the  gentleman, 
they  still  felt  not  safe,  they  were  still  incomplete,  there  were  still  other 
companies  and  other  people  in  the  field,  and  consequently  and  as 
explanatory  of  this,  and  as  showing  the  necessity  for  the  Reading 
Company  buyiug  coal  lands,  he  told  us  about  the  differences  between 
the  coal  regions,  and  we  were  given  a  statistical  comparison  of  those 
regions,  to  show  the  different  degrees  of  development  attained  by  each, 


45 

and  how  far  the  Schuylkill  region  was  behind  the  Wyoming,  the 
Lehigh  and  the  other  regions. 

But,  gentlemen,  your  attention  was  not  called  to  the  fact  that  the 
difference  in  the  development  of  the  anthracite  coal  region  was  mainly 
due  to  the  greater  ease  and  smaller  cost  of  mining  in  certain  parts  of 
that  region,  as  compared  with  the  other  parts.  In  the  Schuylkill 
region,  as  you  yourselves  have  been  informed  by  personal  inspection, 
the  veins  of  coal  lie  almost  upright — an  angle  of  seventy  degrees  is 
probably  the  average  or  perhaps  less  than  the  average — while  in  those 
other  regions  the  coal  lies  flatter,  and  is  easier  and  less  expensive  to 
work;  besides  which  the  coal  from  the  Lehigh  and  other  regions 
certainly  had  in  the  markets  of  the  country  a  better  reputation,  as  has 
already  been  conceded,  than  that  from  the  Schuylkill  region. 

This  very  matter  of  the  weigh-bill,  alluded  to  by  Mr.  Gowen,  was  a 
striking  example  of  this  disparity.  You,  gentlemen  of  the  committee, 
when  down  in  the  mines  in  the  Schuylkill  region,  heard  the  miners 
say,  I  certainly  heard  them  say,  that  that  weigh-bill  would  not  do  ior 
them.  They  did  not  want  it ;  it  did  not  answer  their  purposes ;  it  did 
not  answer  the  purposes  of  the  operators;  it  was  of  no  use  to  anybody, 
so  far  as  that  region  was  concerned  ;  but  it  had  been  asked  for  and 
introduced  by  the  representative  of  one  of  these  other  counties,  viz: 
Luzerne,  because  that  very  fact,  the  difference  in  the  lay  of  the  coal 
measures  of  the  two  counties,  caused  that  which  was  of  no  benefit  for 
Schuylkill  County  to  be,  in  the  view  of  the  Luzerne  County  miners, 
of  the  highest  necessity  for  their  own  region.  This  difference  alone, 
that  is,  the  greater  ease  and  less  expense  of  mining  coal  in  the  Lehigh 
and  Wyoming  regions,  sufficiently  explains  why  those  regions  have 
been  more  developed  than  the  Schuylkill  coal  fields. 

Now,  sirs,  if,  as  alleged  by  the  gentleman,  there  was  danger  of  those 
corporations  which  were  operating  in  Lehigh  and  Luzerne,  encroaching 
upon  the  rights  of  the  State  of  Pennsylvania,  or  taking  away  its 
wealth  from  it  without  making  any  adequate  return,  the  remedy  of  the 
gentleman  was  that  which  he  now  proposes  to  bring  before  you  at  the 
next  session  of  the  body  which  you  represent,  namely,  an  application 
to  the  legislature.  All  these  companies  are  subject  to  the  supervision 
of  the  legislature,  for  they  all  hold  valuable  rights  which  they  have 
acquired  since  the  Constitutional  amendment  of  1858.  Most  of  them 
have  not  only  substantial  amendments  to  their  charters  granted  since 
that  time,  but  also  hold  charters  of  auxiliary  companies  bearing  the 


46 

same  relation  to  them  that  the  Reading  Coal  and  Iron  Company  bears 
to  the  Reading  Railroad  Company,  which  have  been  granted  since 
1858 ;  and  which  are,  therefore,  as  is  now  substantially  conceded  by 
the  gentleman  representing  these  companies,  entirely  within  the  power 
of  the  legislature  to  amend  or  repeal,  if,  in  their  opinion,  such  amend- 
ment or  repeal  is  necessary  for  the  public  interests ;  and  if  there  was 
any  danger  to  the  people  of  Pennsylvania,  it  was  the  duty  of  the 
gentleman  to  have  pointed  out  that  fact  to  the  legislature  and  to  have 
asked  their  interference,  and  not  to  have  assumed  that  two  wrongs 
make  a  right,  and  joined  with  them  himself.  He  should  have  pointed 
out  to  the  legislature  that  these  corporations,  which  had  been  incorpo- 
rated as  the  servants  of  the  people,  had  become  their  masters,  and 
they  who  at  first  were  suppliants  for  subscriptions  to  develop  these 
regions  had  come  to  have  the  controlling  power  in  them.  Therefore, 
so  far  as  that  is  concerned,  any  wrong  or  harm  that  they  could  do  is 
alike  the  wrong  or  harm  which  we  consider  to  have  been  done  by  the 
Reading  Railroad  Company ;  and  both  are  equally  matters  within  the 
control  of  the  legislature. 

The  gentleman,  however,  did  not  attempt  to  apply  a  remedy  for  the 
evil.  This  company  thought  the  matter  over  and  the  gentleman 
became,  as  he  has  told  you,  a  convert.  Well,  we  all  know  that  con- 
verts are  ordinarily  the  most  zealous  professors ;  we  all  know  that  they 
"out-Herod  Herod;"  we  know  that  usually  they  take  the  lead  of 
those  very  men  who  have  converted  them;  and  this  company,  as  I 
think  I  can  show  you,  is  no  exception  to  the  rule.  The  region,  it  is 
stated  as  a  reason  and  an  excuse  for  this  Reading  Company  becoming 
itself  a  land  owner  and  a  miner  of  coal,  needed  the  aid  of  corporate 
enterprise;  it  is  said  that,  except  for  its  coal  measures,  Schuylkill 
County  was  like  the  Desert  of  Sahara.  That  was  so,  but  the  reason 
or  excuse  has  no  application,  for  the  fact  was  that  these  coal  measures 
had  already  been  developed  and  that  the  whole  region  was  filled  with 
collieries,  built,  owned  and  operated  by  individuals  or  by  small  com- 
panies with  mining  powers  simply.  So  far  as  there  is  any  testimony 
before  us,  with  the  single  exception  of  that  East  Norwegian  Shaft, 
THERE  HAS  BEEN  NOTHING  ADDED  THERE  SINCE  THE 
PERIOD  OF  THIS  GRAND  AMALGAMATION  BY  THE 
READING  RAILROAD  COMPANY.  Everything  that  is  there, 
as  appears  by  the  evidence,  had  been  there  before.  The  Mahanoy 
Plane,  which   was  pointed  out  to  us  as  one  of  the  necessities  for  an 


47 

aggregation  of  capital,  as  one  of  the  things  that  required  the  inter- 
position of  a  large  company,  had  been  built  years  before,  and  built  by 
one  of  these  identical  smaller  railroad  companies  that  I  have  enume- 
rated to  you  as  having  been  absorbed  by  the  Reading  Company. 
Everything  was  then  just  as  it  is  now.  THEREFORE.  THERE 
WAS  NO  NECESSITY  FOR  THIS  COMBINATION  TO  COME 
IN  AND  DEVELOP  THE  REGION,  THE  REGION  HAD 
BEEN  DEVELOPED,  the  railroads  had  been  built  and  the  planes 
had  been  built,  the  shafts  and  slopes  dug,  the  breakers  erected  and 
everything  was  done  necessary  for  the  mining  and  transportation  of 
coal,  and  the  whole  region  was  in  operation  and  in  successful  operation. 

But  the  President  of  these  Reading  Companies  became,  as  he  says, 
a  convert  and  in  consequence  went  into  the  market  and  bought  what 
has  been  stated  here  to  be  100,000  acres  of  land,  or  one-third  of  the 
whole  anthracite  coal  field.  I  have  seen  it  stated  in  some  of  the 
statistical  reports  at  a  considerably  larger  number,  but  the  statement 
may  have  been  inaccurate;  the  number  of  acres  he  bought  would 
probably  be  best  known  to  the  gentleman  himself.  TO  ENABLE 
HIM  TO  DO  THIS,  HE  APPLIED  TO  THE  LEGISLATURE 
FOR  A  CHARTER;  and  here  let  me  say  a  word  in  support  of  what 
has  been  said  by  my  learned  friend  and  colleague  in  opening  this  case, 
in  regard  to  the  unconstitutionality  of  this  Act  of  the  Legislature. 
The  charter  of  the  Reading  Railroad  Company  provided,  after  giving 
the  powers  to  build  a  railroad,  to  establish  by-laws,  to  have  a  common 
seal,  etc.,  as  follows  (this  proviso  being  in  the  second  section  of  the 
original  act  of  incorporation)  : — 

"Provided,  that  nothing  herein  contained  shall  be  construed  as  in 
any  way  giving  to  the  said  corporation  any  banking  privileges  whatso- 
ever, or  any  other  liberties,  privileges  or  franchises,  but  such  as  may  be 
necessary  or  incident  to  the  making  and  maintaining  of  the  said  rail- 
road, and  the  conveyance  of  passengers  and  the  transportation  of  coal 
and  of  goods,  merchandise  and  commodities  thereon." 

Therefore,  their  grant  of  powers  was  not  simply  that  which  is  given 
ordinarily  to  a  railroad  company,  but  they  were  expressly  limited  by 
the  charter  itself  to  those  powers  only  which  were  necessary  or  inci- 
dent to  the  conveyance  of  their  traffic.  There  was  no  mere  implication 
as  to  the  limitation  of  their  powers,  but  that  limitation  was  fully 
expressed  in  their  charter  itself.  And  here,  if  I  may  be  permitted,  I 
desire  to  say  a  word  of  personal  explanation.     It  has  been  said  that 


48 

in  opening  this  case  no  allusion  was  made  to  this  particular  point. 
The  explanation  of  that  is  very  simple.  My  colleague  and  myself  had 
been  retained  in  the  case  only  on  the  day  before  that  on  which  we  ap- 
peared before  you,  and  I  do  not  know  that  I  had  seen  at  the  time  I 
opened  this  case  before  you,  the  charters  of  the  companies — certainly 
I  had  had  no  opportunity  to  do  more  than  cursorily  glance  over  them 
— and  under  these  circumstances  the  oversight  occurred. 

Now,  with  reference  to  the  charge  of  the  unconstitutionality  of  the 
powers  claimed  by  this  Eailroad  Company  under  the  charter  they 
obtained;  I  call  your  attention  to  the  fact  that  the  amendment  which 
was  made  to  the  Constitution  of  Pennsylvania  in  1864  expressly 
provides : — 

"  No  bill  shall  be  passed  by  the  Legislature  containing  more  than 
one  subject,  which  shall  be  clearly  expressed  in  the  title,  except  appro- 
priation bills." 

The  charter  of  the  Coal  and  Iron  Company,  which  is  an  act  entitled 
"  An   act  to   incorporate    the    Laurel  Run    Improvement  Company," 
CONTAINS    TWO    SUBJECTS,    AND    IS    THEREFORE    RE- 
PUGNANT   TO    THIS    CONSTITUTIONAL    PROHIBITION. 
The  gentleman  representing  the  other  side  says,  that  this  question  has 
been  passed  upon  and  decided  in  his  favor.    Where,  I  ask,  has  it  been 
so  passed  upon  and  decided  ?     What  case  cited  before  you  decided  it  ? 
The  case  of  Commonwealth  vs.  Greene,  8,  P.  F.  Smith,  226,  which 
was  cited  on  the  other  side,  was  the  case  of  the  establishment  of  a 
criminal  court  in  Schuylkill,  Dauphin  and  Lebanon  Counties,  and  pro- 
vided, in  addition  to  the  establishment  of  the  court,  who  should  be  the 
judge   and  who  should  be  the  clerk,  and  how  the  jurors  should  be 
drawn,  and  contained  various  other  provisions,  every  one  of  which  were 
necessarily  incident  to  the  establishment  and  the  carrying  on  of  the 
criminal  court.     Therefore,  of  course  those  subjects  that  were  therein 
contained  were,  all  of  them,  covered  by  the  title  of  the  act.     When 
you  see  by  the  title  of  an  act  that  it  is  an  act  to  establish  a  criminal 
court,  you  very  naturally  look  into  the  body  of  the  act  for  some  pro- 
vision by  which  that  criminal  court  can  be  carried  on  and  conducted 
after  it  has  been  established.     The  case  of  Church  Street,  in  4,  P.  F. 
Smith,  page  353,  was  cited.     An  examination  of  the  statute  under 
consideration  in  that  case,  shows  that  it  was  an  amendment  to  an  act 
authorizing  the  opening  of  a  road;   and  as  the  Constitution  of  the 
State  eiuce  1700,  and  every  Constitution  that  the  Commonwealth  of 


49 

Pennsylvania  ever  had,  has  provided  that  damages  should  be  paid  wher- 
ever land  was  taken  for  public  use  for  streets  or  highways ;  the  supple- 
ment to  the  act  simply  covered  the  defect  in  the  original  act,  which  had 
not  provided  for  the  payment  of  the  damages  caused  by  the  opening  of  the 
street,  and  provided  that  damages  should  be  paid;  but  the  obligation 
to  pay  these  damages  was  necessarily  implied  without  the  supplement 
aud  the  street  could  not  be  opened  until  they  were  paid.  The  case  of 
Blood  vs.  Mercelliott,  3,  P.  F.  Smith,  391,  was  that  of  the  establish- 
ment of  Forest  County  out  of  some  other  counties,  and  there  the  act 
provided,  besides  establishing  the  boundaries  of  the  new  county,  where 
should  be  the  County  seat,  and  the  County  Commissioners  were 
authorized  to  erect  the  county  buildings  there.  Well,  now,  that  of 
itself  was  a  necessary  and  cognate  subject  to  the  title  of  the  act. 
Certainly,  in  laying  out  the  new  county,  it  was  perfectly  proper  to 
provide  where  the  new  county  seat  should  be,  and  it  was  necessary  to 
make  some  provisions  for  the  erection  of  the  county  buildings  at  that 
place  ;  and,  although  a  proper  exercise  of  power  on  the  part  of  the 
legislature,  and  sufficiently  mentioned  in  the  title  as  it  was,  it  has  been 
referred  to  by  the  present  Chief  Justice  of  our  State  as  being  on  the 
very  border  line  of  the  cases  upon  the  point,  whether  or  not  more 
than  one  subject  was  included  and  whether  or  uot  the  title  sufficiently 
indicated  the  contents  of  the  act.  But,  the  proper  way  in  which  to 
look  at  the  question,  is  to  consider  the  old  law,  the  mischief  and  the 
remedy.  The  old  law,  the  law  as  it  stood  before  the  adoption  of  the 
Constitutional  amendment  was,  that  one  act  might  cover  anything,  and 
the  title  of  an  act  of  the  legislature  was  no  indication  of  its  contents 
and,  as  those  ot  you,  gentlemeu,  who  are  lawyers  well  know,  the  very 
act  which  effected  a  complete  revolution  in  the  possession  of  property 
by  a  married  woman  in  Pennsylvania — I  mean  the  act  of  1848 — was 
an  act  that  was  entitled,  "An  act  to  incorporate  the  LeRaysville 
Phalanx,"  (a  militia  company  somewhere  in  the  interior  of  the  state) 
"and  for  other  purposes."  The  title  of  the  act  was  no  indication 
whatever  of  its  contents.  Neither  the  legislature  nor  the  people  had 
notice  by  the  title  of  what  was  contained  therein.  To  correct  this 
practice,  the  amendment  to  the  Constitution  ,was  passed,  and  it  had  a 
double  purpose,  namely,  that  not  only  the  legislature  that  passed  the 
bill  should  know  what  was  in  it  by  its  title,  but,  that  the  people  should 
know,  when  the  titles  of  acts  were  published,  what  the  contents  of 
those  acts  were  and  what  their  object  was.      In  the  case  of  this  Laurel 


50 

Run  Company,  it  is  said  that  the  ohject  of  the  act  was  known  to  the 
legislature;  it  was  so  argued  and  stated  upon  the  floor  here;  but  the 
fact  remains  that  the  title  of  the  act  was  no  notice  to  the  people. 
Indeed,  that  it  was  no  notice  to  the  public  has  been  assumed  by  the 
other  side  and  we  have  been  asked,  "  why,  would  you,  if  you  had  been 
in  our  places,  have  sent  notice  of  your  purpose  to  the  other  side?" 
Now,  sirs,  let  me  call  your  attention  to  this.  The  charter  of  the 
Reading  Railroad  Company  provided,  as  you  have  seen,  that  the 
powers  of  that  company  should  be  limited  to  those  necessary  for  the 
maintaining  of  their  railroad  and  the  transportation  of  goods,  passen- 
gers and  merchandise  thereon.  This  act  to  incorporate  the  Laurel 
Run  Improvement  Company,  after  incorporating  that  company,  pro- 
vides that  "  it  shall  be  lawful  for  the  President  and  Directors  of  said 
company  to  subscribe  for  or  purchase  the  lands  or  stock  of  any  other 
incorporated  company  in  the  State  of  Pennsylvania,  and  for  any  rail- 
road or  mining  company  existing  under  the  laws  of  this  state,  to 
subscribe  for  or  purchase  the  stock,  or  to  purchase  or  guarantee  the 
bonds  of  the  company  hereby  incorporated."  It  was  perfectly  proper 
that  in  the  act  to  incorporate  the  Laurel  Run  Improvement  Company, 
the  Laurel  Run  Improvement  Company  should  be  empowered  to 
receive  subscriptions  from  other  companies,  or  make  subscriptions  to 
other  companies,  but,  to  authorize  the  Reading  Railroad  Company  to 
subscribe  for  its  stock,  more  than  that  was  required.  An  express 
legislative  authority  to  the  Reading  Railroad  Company  to  do  this  was 
absolutely  necessary.  It  was  not  the  case  of  an  individual  making  a 
subscription,  because  individuals  need  no  legislative  authorization  to 
enable  them  to  deal  with  their  property  as  they  choose,  but  a  corpora- 
tion does  need  this.  It  has  been  held  time  and  time  again,  it  has  been 
held  so  often,  that  it  is  matter  of  law  known  to  every  business  man  in 
our  commonwealth,  that  corporations  have  no  powers  except  those 
which  are  expressly  given  to  them ;  there  is  for  them  no  such  thing  as 
a  power  by  implication.  Chief  Justice  Black,  in  his  nervous  and 
forcible  language,  thus  expresses  the  rule:  "In  the  construction  of  a 
charter,  to  be  in  doubt  is  to  be  resolved,  and  every  resolution  which 
springs  i'rom  doubt  is  against  the  corporation.  If  the  usefulness  of 
the  company  would  be  increased  by  extending  its  privileges,  let  the 
legislature  see  to  it,  but  remember  that  nothing  but  plain  English 
words  will  do  it." 

Pennsylvania  Railroad  vs.  Canal  Commissioners — 9  Harris  22. 


51 

Now,  it  was  possible  in  the  act  to  incorporate  the  Laurel  Run 
Improvement  Company,  to  authorize  the  Laurel  Run  Improvement 
Company  to  subscribe  for  the  shares  of  other  companies;  that  was  a 
power  which  was  cognate  and  relative  to  its  own  incorporation ;  but 
to  authorize  another  company  to  subscribe  to  it  required  an  additional 
act  authorizing  that  other  company  so  to  do,  inasmuch  as  it  was  a 
grant  of  power  to  another  corporation.  Therefore  I  say  this  act 
contains  two  subjects:  First — that  it  authorizes  the  Laurel  Run 
Company  to  exercise  its  numerous  corporate  privileges ;  second — that 
it  authorized  other  companies  to  subscribe  for  and  purchase  its  stock. 
And  I  say,  that  in  order  to  make  this  authority  to  subscribe  to  the 
stock  of  the  Laurel  Run  Company  available  to  the  Reading  Railroad 
Company,  and  to  enable  it  to  get  the  benefit  of  this  act,  it  was 
necessary  to  legislate  expressly  for  that  purpose,  and  expressly  give 
that  power  to  the  Reading  Railroad  Company. 

Seeing  this  difficulty,  the  gentleman  undertook  to  say  that  the  words 
"  and  it  shall  be  lawful  *  *  *  *  for  any  railroad  or  mining  company, 
existing  under  the  laws  of  this  state,  to  subscribe  for  or  purchase  the 
stock,  or  guarantee  the  bonds  of  the  company  hereby  incorporated," 
were  surplusage  and  unnecessary,  but  it  is  too  plain  to  need  argument, 
that  if  those  words  had  been  omitted,  he  would  have  had  nothing  to 
stand  upon,  and  there  would  have  been  no  authority  of  any  kind  for 
the  Reading  Railroad  Company  to  subscribe  for  or  purchase  the  stock 
of  the  Reading  Coal  and  Iron  Company. 

NOW,  LET  THE  GENTLEMAN  TAKE  EITHER  HORN  OF  THE  DILEMMA: 
Either  this  was  an  act  to  incorporate  the  Laurel  Run  Improvement 
Company,  and  to  authorize  the  Reading  Railroad  Company  to  own  its 
stock — in  which  case  it  contained  two  subjects,  and  teas  unconstitutional 
for  that  reason — or  it  was  an  act  to  enable  the  Reading  Railroad 
Company  to  mine  and  sell  Coal,  in  the  name  of  the  Laurel  Run 
Improvement  Company — in  which  case  the  title  of  the  Act  not  only  did 
not  "  clearly  express"  the  object  of  it,  but  did  not  express  the  object  of  it 
at  all.  Either  this  was  an  act  to  authorize  two  things  to  be  done,  or 
it  was  an  act  with  but  one  purpose  and  one  object,  in  which  case  that 
purpose  and  that  object  were  not  expressed  in  the  title  of  the  Act,  as 
is  required  by  the  Constitution  of  the  State. 

Now  this  is  no  matter  simply  of  mere  individual  opinion;  it  has  been 
passed  upon  judicially.  The  gentleman  was  right  perhaps  when  he 
said  that  there  had  been  various  decisions  upon  it,  and  that  the  consti- 


52 

tutional  provision  had  been  sometimes  held  to  be  a  directory  provision 
only.      An  examination  of  the  authorities  collected  in  Cooley  on  Con- 
stitutional  Limitations,  pp.  451  to  461,  I  think;  I  cite  from  memory; 
shows  that  this  constitutional  provision  has  been  adopted  in  many  of 
the  States  of  the  Union  and,  in  some  of  them,  a  long  time  ago;  that 
at  first,  viz:  prior   to   1864-5,  it  was   held   sometimes  that  it  was  a 
directory   provision   only,  and   therefore   could  be   disregarded  if  the 
Legislature  so  pleased;  and  wherever   that  was  held,  the  Legislature 
almost  invariably  did  so  please,  or  else  the  construction  of  it  was  so 
liberal,  and  the  titles  of  Acts  allowed  to  be  so  indefinite,  that  it  almost 
meant  nothing  at  all,   and   the  benefits  to  be  derived  from   it  were 
frittered   away.     But  such   has  never  been  the  law  of  Pennsylvania 
That  provision  was  not  introduced  into  that  State  until  the  great  abuses 
of  the  old  system  of  legislation  were  discovered,  and  since  its  intro- 
duction there  has  not  been  one  word  of  a  judicial  decision  which  inti- 
mated for  one  moment  that  an  act  could  contain  two  objects  or  one 
object   not  clearly   expressed   in  its   title   and   still   be   constitutional. 
Almost  the  last  case  on  the  subject — I  allude  to  the  case  of  the  appeal 
of  the  Union  Passenger  Railway  Co.,  29  Legal  Intelligencer,  380 — is 
a  very  strong  one  to  show  how  far  the  Supreme  Court  of  the  State 
holds  the  Legislature  to   that  constitutional  restriction.     The  Union 
Pass.  Railway  Co.  had  been  authorized  to  lay  its  railroad  tracks  through 
the  city  of  Philadelphia,  in  very  many  of  its  streets.     They  desired  to 
lay  tracks  in  another  street,  and  an  act  was  introduced  which  was  thus 
entitled:  "A  further  supplement  to  an  Act  entitled  an  Act  to  incorpo- 
rate the  Union  Pass.  Railway  Co.,  approved  April  8th,  1864,  autho- 
rizing   said    Company    to    declare    dividends    quarterly    and    to   lay 
additional  tracks  of  railway."     Now  the  Supreme  Court  said  that  is  a 
supplement ;  of  course  you  can  add  one,  two,  three,  four  or  five  powers 
to  the  corporation  by  a  supplement,  just  as  you  can  give  eight,  ten,  or 
twelve   powers   to   a   corporation    by  an  act  to  incorporate;  the  word 
"supplement''  may  be  considered  suflicieut  to  express  that  thus  far  the 
title  is  sufficient,  but  when  you  say  "simply  to  lay  additional  tracks  of 
railway,"  you  do  not  say  that  the  corporation  is  to  occupy  additional 
territory,  and  therefore  this  title  does  not  express  the  object  of  the  act 
and  the  act  is  unconstitutional. 

That  the  natural  implication  from  the  title  would  be  that  the  Railway 
Company  was  to  lay  additional  tracks  where  it  already  had  tracks;  and 
if  they  wanted  to  extend  their  powers,  if  they  wanted  to  lay  a  line  of 


53 

track  where  they  had  then  no  track  laid,  they  must  say  so  in  the  title 
to  their  supplement. 

Now  sirs,  in  the  face  of  that  decision,  how  can  the  Reading  Railroad 
Company  say  that  they  have  the  right  to  subscribe  to  the  stock  of  the 
Reading  Coal  and  Iron  Co.,  by  virtue  of  "  An  act  to  incorporate  the 
Laurel  Run  Improvement  Company." 

Senator  Rutan :  There  is  a  remedy  for  that  in  the  courts  though. 
Mr.  Pettit:  Yes,  sir;  there  is  a  remedy  for  that  in  the  courts;  but 
the  remedy  in  the  courts  is  only  at  the  suit  of  the  State.  The  Attorney 
General  is  armed  with  the  power  to  call  any  corporation  to  account  by 
filing  his  suggestion  and  asking  for  the  writ  of  quo  warranto;  and  if 
his  suggestion  shows  sufficient  reason,  the  court  is  bound  to  grant  it, 
The  Attorney  General  is  the  representative  of  the  State,  and  therefore 
it  is  a  perfectly  proper  matter  for  you,  gentlemen,  whose  attorney  he 
really  is,  to  consider  this  question,  and  to  say  whether  or  not  you  will 
direct  him  to  file  his  suggestion  and  ask  for  the  writ  of  quo  loarranto, 
to  inquire  by  what  authority  it  is  that  the  Reading  Railroad  Company 
claims  and  exercises  the  power  to  own  coal  lauds  and  mine  coal. 

Now,  let  us  look  at  the  question  from  a  common  sense  view.     Can  it 
be  pretended,  for  a  moment,  in  an  assemblage  other  than  one  composed 
of  lawyers,  used  to  so  construing  or  trying  to  construe  language  as  to 
give  words  a  sense  opposite  to  that  in  which  they  are  used  and  which 
they  would  ordinarily  bear,  that  when  you  have  a  constitutional  provi- 
sion, requiring  that  acts  of  assembly  shall   have,  first,  but  one  object; 
and,  secondly,  that  that  object  shall  be  clearly  expressed  in   the  title, 
that  an  act  to  incorporate  the  Laurel  Run  Improvement  Company  with 
one  million  of  capital,  can  give  the  power,  by  virtue  of  that  act  to  the 
Philadelphia  and  Reading  Railroad  Co..  already  in  existence,  to  absorb 
that  charter  and  to  expend  some  FIFTY  MILLIONS  or  thereabouts 
iu  the  purchase  of  coal  lands,  and  to  engage  in  the  business  of  mining 
coal.     Can  it  be  pretended  that  by  virtue  of  that  act  a  railroad  com- 
pany can  do  such  a  thing,  and  that  there  is  but  one  subject  in  the  act 
and  that  subject  is  sufficiently  indicated  by  such  a  title  to  the  act?  It 
seems  to  me  that  the  proposition  is  too  plain  to  need  further  comment. 
But  these  suggestions  are  merely  incidental,  for  although  pertinent 
to  the  inquiry  here,   they  do   not   present   the  inquiry   itself.     That 
inquiry   is   simply  whether  this  act  to  incorporate  the  Laurel    Run 
Improvement  Company  does  give  the  Reading   Railroad  Company  the 
powers  which  it  claims.     The  final  decision  of  that  question  must  rest 


54 

with  the  courts,  hut  it  is  your  duty  as  legislators,  to  so  direct  the 
Attorney  General  of  the  Commonwealth,  that  it  shall  be  brought  before 
the  courts,  to  direct  that  it  shall  be  properly  raised  lor  them  to  pass 
upon  and  filially  decide. 

This  investigation  was  ordered  by  the  Legislature  of  Pennsylvania, 
in  consequence  of  a  petition,  a  copy  of  which  I  hold  in  my  hand,  which 
sets  out  that  on  the  18th  day  of  May,  1871,  this  Laurel  Run  Company 
was  incorporated  by  an  act  of  Assembly,  which  contained  more  than  one 
subject,  which  subject  was  not  clearly  expressed  in  its  title,  according 
to  law;  that  shortly  thereafter  its  title  was  altered  to  that  of  the 
Philadelphia  and  Reading  Coal  and  Iron  Company,  that  the  Phila- 
delphia and  Reading  Railroad  Company  was  its  only  stock-holder, 
operating  through  it  as  an  adjunct,  and  being  thus  enabled  to  engage 
in  such  business  as  it  is  not  permitted  to  engage  in  by  its  own  charter; 
"that  the  Philadelphia  and  Reading  Coal  and  Iron  Company  has 
bought  and  is  buying  large  bodies  of  coal  and  iron  ore  lands,  and  other 
real  estate,  in  this  and  other  States,  and  has,  through  the  almost 
unlimited  powers  granted  to  the  Laurel  Run  Improvement  Company, 
entered  into  many  branches  of  business  incompatible  with  the  duties 
of  the  Philadelphia  and  Reading  Railroad  Company,  as  common  carriers, 
and  with  the  freedom  of  the  people  of  this  and  other  States."  And, 
"That  THEIR  INTERFERENCE  WITH  THE  RIGHTS  OF  THE 
CITIZENS  OF  THIS  COMMONWEALTH  ALSO  EXTENDS  TO 
MILLIONS  OF  THE  PEOPLE  OF  OTHER  STATES,  all  seriously 
affected  as  consumers  of  Anthracite  Coal,  by  a  conspiracy  into  which 
they  have  entered  (and  have  been  mainly  instrumental  in  forming,  and 
which  could  not  exist  without  them)  with  other  chartered  companies 
controlling  the  production  and  transportation  of  Anthracite  Coal." 

In  consequence  of  that  petition,  which  was  signed,  not  by  any  "three 
tailors  of  Tooley  Street,"  but  by  thousands  of  the  citizens  of  this 
commonwealth — so  numerously  signed  that  it  appealed  in  a  voice  of 
thunder  at  your  doors,  which  compelled  your  attention  to  it,  and 
obliged  you  to  raise  the  committee  which  I  am  now  addressing  this 
resolution  was  passed. 

"That  whereas,  the  Philadelphia  and  Reading  Railroad  Company, 
who  are  ostensible  stockholders  of  the  Philadelphia  and  Reading 
Coal  and  Iron  Company,  are  mining  and  selling  coal  in  direct  violation 
of  their    chartered  ritrhts." 


55 

"  And  whereas,"  and  I  ask  your  careful  attention  to  this,  because  it 
is  the  gist  of  this  inquiry,  aud  was  carefully  omitted  when  my  friend 
on  the  other  side  yesterday  referred  to  this  resolution. 

'■And  whereas,  it  has  been  represented  upon  good  authority  that 
THE  PHILADELPHIA  AND  READING-  RAILROAD  COM- 
PANY HAVE  CONSPIRED  TO  IMPROPERLY  CONTROL  THE 
MINING  AND  TRANSPORTATION  AND  PRICE  OF  COAL. 

And  whereas,  the  complaint  is  of  grave  import,  and  warrants  a 
careful  investigation  by  this  body,  to  determine  whether  the  said 
Philadelphia  aud  Heading  Railroad  Company,  or  the  Philadelphia  and 
Reading  Coal  and  Iron  Company,  have  in  any  manner  exceeded  the 
rights  and  privileges  granted  to  them  by  their  charter. 

Therefore  be  it  Resolved,  That  this  committee  be  appointed,  &c. 

The  question  of  the  unconstitutionality  of  the  Laurel  Run  Act,  so 
far  as  it  gives  the  Railroad  Company  any  additional  powers,  referred  to 
alike  in  the  petition  and  in  the  resolution,  I  have  already  argued  ;  and 
the  other  question,  that  of  the  existence  of  the  combination  is  the  one 
for  you  mainly  to  consider,  because  over  that,  you,  and  not  the  courts, 
have  jurisdiction.  It  is  not  a  question,  the  decision  of  which  you  can 
throw  upon  the  Attorney  General  or  the  courts,  but  it  is  one  which 
you  must  decide  for  yourselves. 

Now,  gentlemen,  that  these  Reading  Companies  have  combined  with 
the  other  large  coal  mining  and  transportation  companies  to  govern  and 
control  the  price  of  coal,  stands  admitted, — it  requires  no  argument  to 
demonstrate  it, — but  many  reasons  were  given  by  my  friend,  the 
learned  counsel  for  the  companies,  as  excuses  for  forming  this 
combination. 

We  are  told,  in  the  first  place,  as  one  reason  for  this  combination, 
that  there  was  a  certain  condition  of  things  existing  in  the  anthracite 
coal  trade.  What  was  it?  Why,  it  was  that  everybody  made  his  own 
price — that  was  one  feature  of  it.  These  New  York  companies,  this 
terrible  power  which  had  forced  the  Reading  Railroad  Company  into 
this  policy,  which  had  "  converted  "  them — these  companies  were 
competed  with  and  competed  with  successfully  by  the  individual  miners 
and  operators  of  Schuylkill  County.  The  companies  were  not  always 
the  most  successful;  I  doubt  whether  any  one  of  them,  certainly  not 
many  of  them,  have  mined  more  coal  than  a  single  individual  operator, 
namely,  Mr.  Pardee.  We  were  told  by  one  gentleman,  Mr.  Parrish, 
when  on  the  stand,  that  his  company  was  on  the  verge  of  bankruptcy 


56 

in  1872.  But,  Mr.  Thomas,  an  individual  operator,  not  owning  his 
own  lands  but  having  to  pay  to  the  City  of  Philadelphia  a  royalty  on 
every  ton  of  coal  he  raised, — he  told  you  that  he  was  making  money. 
in  1872.  Therefore  this  "condition  of  trade"  that  has  been  talked 
about  to  you  is  a  mere  phantom;  there  was  no  sufficient  warrant  for 
the  representations  made  by  my  friend  in  that  particular.  The 
Schulkill  region  was  in  the  same  condition  then  that  it  is  to-day,  except 
so  far  as  the  individual  operators  have  profited  by  the  combination  and 
the  Reading  Railroad  Company  has  absorbed  the  lands.  The  trade 
was  subject  to  the  ordinary  laws  of  trade;  it  was  governed  by  the  laws 
of  supply  and  demand.  At  certain  times  the  price  was  lower  than  at 
others ;  sometimes,  in  periods  of  unusual  scarcity,  prices  would  rise, 
but  the  fact  remained  that  every  man  made  his  own  price  which  was 
regulated  by  competition  ;  every  man  made  his  own  terms  with  his 
miners  or  operatives ;  he  worked  when  he  pleased,  and  he  quit  when 
he  pleased.  If  he  did  not  like  the  business,  he  went  out  of  it;  if  he 
did  not  understand  it  or  had  not  sufficient  capital  to  run  it,  he  would 
fail,  and  if  he  had  sufficient  capital  to  carry  it  on  he  made  money. 
The  prices  varied :  some  collieries  got  more  money  for  their  coal  than 
did  other  collieries;  some  collieries  prepared  their  coal  better  than  did 
other  collieries;  but  the  collieries  themselves,  the  improvements,  the 
railroads,  the  planes,  the  breakers,  the  shafts, — everything  which  we 
have  had  depicted  before  us  as  costing  the  individual  so  much  more 
than  it  cost  the  corporation — everything  which  was  at  the  mercy  of  a 
single  spark  from  a  passing  locomotive  was  already  there :  in  not  one 
single  iota  has  the  condition  of  the  region  in  this  respect  been  changed. 
Now,  there  is  another  consideration  worthy  of  mention  in  connection 
with  what  has  been  said  on  this  subject  of  the  condition  of  trade  in 
1872.  You  will  recollect — it  is  admitted  by  us  and  it  is  conceded  by 
the  other  side — that  when  these  lands  were  purchased,  these  gentlemen 
of  the  Philadelphia  and  Reading  Companies  did  not  intend  to  engage 
in  the  business  of  mining  or  to  enter  into  this  combination.  Con- 
sequently we  will  find  something  that  will  be  interesting  in  the 
Report  of  the  Company  made  in  January,  1873,  where  reference  is 
made  to  the  condition  of  the  trade  in  1872 ;  this  year  which  is 
represented  to  have  been  so  dreadful ;  this  year  in  which  these  coal 
operators  who  have  profited  by  this  combination  say  they  were  on  the 
verge  of  bankruptcy,  that  they  were  losing  seventy-five  cents  per  ton, 
that  they  did  not  know  what  would  happen   to  them ;    this  year  in 


57 

which  as  they  allege  the  coal  trade  was  so  universally  depressed. 
This  is  what  the  Reading  Railroad  Company  tells  its  stockholders 
and  the  public  before  they  engaged  in  mining,  and  while  they  are 
simply  engaged  in  transporting  coal  and  wanted  the  largest  possible 
tonnage. 

I  read  from  page  20  of  the  Report  for  that  year  (January,  1873)  : 
"The  largely  increased  production  of  last  season"  (that  is  to  say  the 
season  of  1872  which,  as  you  recollect,  had  been  a  full  year;  there 
had  been  no  strike  ;  every  operator  had  worked  his  full  number  of 
months  and  to  his  full  capacity,)  "  was  all  disposed  of.  The  market 
was  better  during  the  last  two  months  than  at  any  other  period  of  the 
year,  and  it  is  believed  that  the  stock  of  coal  on  hand  at  the  close  of 
the  shipment  season  of  1872  was  no  larger  than  that  held  at  the  close 
of  the  previous  year." 

That  is  what  they  thought  about  it  before  this  combination  was 
formed.  And  then  on  the  next  page  or  two — I  will  not  read  it  all  to 
you — they  go  on  to  tell  why  it  is  that  in  1873  they  think  the  trade  is 
going  to  be  so  much  better  than  ever  it  was  before.  They  say  it  is 
because  in  1872  the  prices  were  rather  lower  than  they  had  been  in 
1871,  that  this  had  brought  about  an  increased  demand,  and  therefore 
that  the  coal  would  have,  more  purchasers  than  it  ever  had  before. 
They  say  that  nobody  who  has  ever  used  anthracite  coal  as  a  domestic 
fuel  will  ever  use  anything  else,  and  that  therefore,  by  reason  of  that 
slight  decrease  in  price,  they  were  able  to  send  it  to  the  West  and,  to 
some  degree,  to  supplant  wood  and  that  they  had  no  doubt  that  that 
trade  would  not  only  continue  but  would  increase. 

They  go  on  to  state  the  beneficial  effect  that  it  has  had  upon 
manufacturers  and  in  every  branch  of  business;  they  give  full 
particulars  of  why  it  is  that  that  trade  is  to  be  so  largely  increased. 
And  after  giving  in  detail  their  reasons  on  page  71,  they  say :  "  If  the 
above  facts  justify  the  belief  that  nearly  three  millions  of  tons  more 
coal  will  be  required  in  1873  than  were  seut  to  market  in  1872,  and  if 
by  twelve  mouths  of  steady  work  during  1872,  the  increased  pro- 
duction of  coal  over  that  of  seven  months'  work  during  the  previous 
year  was  only  about  3,300,000  tons,  it  is  not  unreasonable  to  suppose 
that  it  will  be  difficult  to  produce  this  year  any  quantity  so  greatly  in 
excess  of  the  demand  as  to  depress  the  market  to  any  considerable 
degree." 

They  go  on,  then,  to  say  therefore  that,  anticipating  a  large  increase 


58 

in  their  traffic,  they  have  made  a  new  mortgage  of  $60,000,000,  and 
are  going  to  increase  their  facilities  and  to  build  more  steam  colliers. 

Now,  gentlemen,  what  do  the  operators  say — these  gentlemen  who 
came  with  such  lung  faces  before  you  aud  who  were  so  extremely 
desirous  of  impressing  upon  you  the  immense  importance  of  this  com- 
bination to  their  existence  in  1873,  and  how  every  one  of  them  would 
have  gone  to  destruction  if  it  had  not  been  for  that  combination? 
These  gentlemen  say,  in  response  to  the  proposition  that  had  been 
made  to  them  by  Mr.  Gowen  to  form  a  "pool" — I  read  from  page  152 
of  the  testimony — (you  recollect  they  held  a  meeting  and  passed 
several  resolutions  which  were  prefaced  by  the  usual  "  whereas,"  these 
coal  operators  express  themselves  very  much  in  the  style  of  the  lawyers 
sometimes) — they  say  : — 

"  Whereas,  it  is  now  self-evident  to  all  parties  understanding  the 
subject,  that  the  period  of  greatest  depression  is  past,  because  the 
supply  for  1873  will  but  little,  if  any,  exceed  the  demand." 

'J1  hat  was  their  opinion  at  that  time  ;  and  here  let  me  say.  it  will 
not  do  to  cite  subsequent  events  as  a  justification  for  this  combination, 
because  this  combination  had  been  formed  at  this  very  time  and  two 
months  before  it,  while  this  trade  was  in  such  a  prosperous  condition 
and  while  in  these  very  last  two  months,  after  a  full  year,  the  supply 
of  coal  on  hand  and  unmarketed  was  no  greater  than  it  usually  was 
before,  while  these  operators  were  of  the  opinion  that  the  period  of 
greatest  depression  had  passed.  This  combination  was  formed  then, 
and  it  was  in  view  of  the  state  of  circumstances  thus  presented,  and 
not  in  view  of  future  events  or  the  depression  in  business  which  took 
place  in  the  next  September,  nearly  a  year  afterwards,  that  this 
combination  was  made. 

As  another  reason  for  this  combination,  we  were  told  that  there  was 
a  great  difference  between  the  line  and  city  trade  and  the  tide-water 
trade;  we  were  told  that  the  manufacturers  ou  the  waters  of  the 
Hudson  and  on  Massachusetts  Bay,  got  their  coal  at  a  rate  a  dollar 
per  ton  cheaper  than  that  at  which  it  was  supplied  to  the  gentlemen 
who  manufactured  in  the  valley  of  the  Schuylkill. 

Why  was  this,  let  me  ask :  when  you  took  the  coal  out  of  the  earth, 
did  it  cost  one  dollar  per  ton  less  to  take  it  to  Boston  than  when  you 
were  going  to  leave  it  at  Phoenixville?  why,  of  course  not.  The 
reason  of  it  was  because  the  tolls,  the  drawbacks  were  made  to  fit  the 
case.      We  are  told  that  these  gentlemen  appealed   to  the  President  of 


50 

the  Railway  Company,  and  said,  "how  is  this?  we  are  going  to  move 
to  the  Hudson;  we  can  get  our  coal  cheaper  there  than  we  can 
nere — why  is  it  that  we  can  get  it  a  dollar  per  ton  cheaper  there  than 
we  can  get  it  here?"  The  fact  could  not  be  denied  that  the  gentleman 
himself  or  the  company  he  represented  carried  the  coal  past  the  doors 
of  these  manufacturers  in  the  valley  of  the  Schuylkill  to  tide-water, 
and  shipped  it  to  New  York  for  a  dollar  per  ton  less  than  he  charged 
these  manufacturers  along  the  line  of  his  road.  It  was  not  these 
operators,  it  was  not  these  factors,  it  was  not  these  retailers  who  were 
guilty  of  this  extortionate  discrimination;  they  had  nothing  to  do  with 
that.  Messrs.  Branson  and  Borda  and  Van  Dusen  had  nothing  to  do 
with  that.  These  very  Phoenixville  works,  that  the  gentlemen  spoke 
of  yesterday,  right  on  the  line  of  the  road,  that  were  condemned  to  go 
to  the  Hudson,  had  their  coal  only  upon  paying  an  extra  dollar  per 
ton,  for  the  reason  that  at  Port  Richmond  the  drawbacks  were  so  made. 
If  this  company  was  so  exclusively  a  Pennsylvania  corporation  as  has 
been  claimed  here,  and  was  seeking  to  develop  our  State  in  preference 
to  New  York  or  any  other  locality,  if  they  were  so  firmly  devoted  to 
building  up  the  interests  of  our  State,  if  every  ton  of  coal  burned  in 
process  of  manufacture  along  the  line  of  their  road  gives  them  so  much 
more  tonnage,  and  gives  them  so  much  more  profit,  that  they  look  alone 
to  the  interests  of  the  people  of  our  commonwealth,  as  they  would  have 
us  believe,  why  did  they  not  carry  for  the  Phoenixville  people  at  the 
same  rate  that  they  carried  for  the  New  York  and  Boston  people? 

Another  alleged  reason  for  this  combination  was  the  extortions  of 
THE  MIDDLEMEN.  And  here  I  recollect  that  the  only  occasion 
upon  which  I  have  noticed  any  question  being  made  concerning  the 
ability  with  which  the  Reading  companies  are  managed,  was  when  I 
saw  in  a  Boston  paper  a  little  squib,  in  which  it  was  stated  that  the 
President  of  those  companies  was  suffering  from  MIDDLE  MANIA 
CEREBRA;  and  that  this  criticism  was  not  wholly  out  of  place,  is 
evident  from  the  fact  that  when  the  gentleman  rose  and  commenced  to 
address  you,  he  began  on  the  middlemen;  he  hit  them  all  the  way 
through  and  gave  them  almost  the  last  words  of  his  speech.  Who  are 
the  middlemen?  are  they  a  peculiarity  of  the  coal  business,  or  a  class 
that  does  not  appear  in  any  other  business?  Does  not  the  manufacturer 
in  the  East  who  makes  his  cheese  or  his  shoes  have  his  agent  elsewhere 
to  sell  the_article?  Every  manufacturer  has  a  middleman  ;  all  whole- 
salers have  middlemen ;  and  in  the  purchase  and  sale  of  almost  every 


60 

article  you  buy  there  are,  in  addition  to  the  manufacturer  and  the  man 
from  whom  you  make  the  purchase,  almost  a  dozen  middlemen 
concerned.  It  is  "  the  middlemen "  who  make  up  our  community. 
It  would  be  perhaps  a  very  nice  thing  if  there  were  no  "  middlemen," 
many  articles  might  be  a  great  deal  cheaper,  but  then  unfortunately 
none  of  us  would  have  any  money  to  buy  with,  because,  indeed,  we 
would  most  of  us  be  without  occupation.  We  are  all,  more  or  less, 
"  middlemen." 

Now,  as  was  stated  by  my  friend  and  colleague  in  opening  this  case, 
we  called  two  or  three  representative  men  among  these  factors  of  the 
coal  men,  and  they  have  been  alluded  to  at  considerable  length  by 
my  friend. 

The  first  that  was  mentioned  was  Mr.  Van  Dusen.  He  belonged  to 
this  dreadful  class,  this  class  that  ate  up  all  the  profits  and  added  so 
much  to  the  cost  of  coal,  as  was  attempted  to  be  shown  you;  he  was 
one  of  those  who  held  wharves  at  Richmond. 

And  now  let  me  say  a  word  about  the  assumed  generosity  of  the 
company  in  regard  to  its  wharves  at  Richmond.  They  claim  that  that 
property  is  worth  ten  millions  of  dollars,  and  they  assume  a  certain 
merit  for  not  having  before  this  sold  that  property,  and  they  almost  say 
they  would  have  sold  it  except  that  they  wanted  to  develop  the 
mercantile  interests  of  Philadelphia.  Why,  gentlemen,  when  making 
that  statement,  the  learned  couusel  must  have  forgotten  that  the  very 
testimony  before  you  shows,  that  at  those  wharves  in  Richmond  he 
ships  2,500,000  tons  of  coal  and  that  every  ton  of  that  number  pays 
him  $2.  Therefore,  when  he  can  get  $5,000,000  per  year  of  rent  for 
a  property  assumed  to  be  worth  $10,000,000,  I  do  not  wonder  that  he 
does  not  sell  the  property.  I  think  he  regards  it  as  a  good  enough 
speculation  as  it  is.     Why  should  they  sell  it  ? 

Mr.  Van  Dusen,  who  got  his  wharf  for  nothing,  had  a  business 
there,  if  1  recollect  his  testimony,  of  about  70.000  tons  a  year;  and 
that  70,000  tons  paid  the  Reading  Railroad  Company  $110,000  per 
year  in  tolls.  At  about  the  time  that  Mr.  Van  Dusen's  wharf  was 
taken  away  from  him  by  this  circular  of  December  27th,  1872,  be 
wrote  a  letter  to  the  company  upon  that  subject.  It  was  a  very  plain, 
straight-forward  letter.  Recollect  that  this  gentleman  had  done  a  very 
large  business;  his  annual  tonnage  there  at  Port  Richmond  alone  was 
70,000  tons;  he  had  been  in  the  business  for  a  life  time;  he  had  paid 
the  Reading  Company  millions  of  dollars  of  toll.     The  circular,  when 


61 

he  received  it,  came  upon  him  like  a  thunder-clap.  He  had  offices  in 
New  York  and  in  Boston.  These  "  middlemen,"  as  you  will  recollect 
the  testimony  proved,  had  pushed  the  coal  of  the  Schuylkill  region 
from  the  Valley  of  the  Schuylkill  almost  down  to  the  Gulf  on  the  one 
side,  and  clear  up  to  Maine  on  the  other.  Wherever  it  could  reach  by 
tide-water,  Schuylkill  coal,  through  the  exertions  of  these  "middle- 
men," was  to  be  found.  In  the  letter  which  he  wrote  to  the  President 
of  the  Railroad  Company,  immediately  or  shortly  after  receipt  of  the 
circular,  this  gentleman  said  : — 

"As  the  trade  seems  to  be  shaping,  from  the  action  of  your  com- 
pany, it  looks  to  us  that  our  firm,  who  do  not  represent  any  particular 
coal  at  present,  must  be  forced  out  and  abandon  a  business  int  which 
we  have  been  engaged  the  best  part  of  our  lives.  This  naturally 
causes  us  some  alarm. 

Taking  it  for  granted  that  the  product  of  Schuylkill  coal  for  the 
year  1873  is  controlled  by  your  company,  and  those  who  mine  and  sell 
their  own  product,  with  a  few  exceptions,  we  are  at  a  loss  to  answer 
your  circular  of  December  27th,  addressed  to  us  in  reference  to  our 
application  for  wharf  room.  For  the  last  nineteen  years,  our  Mr.  Van 
Dusen,  with  different  associates,  has  had  allotted  him  wharf  room  at 
Richmond,  and  during  all  these  years  his  different  firms  have  never 
received  a  complaint  from  your  company  under  its  respective  manage- 
ment, and  he  has  used  his  capital  both  in  the  business  of  mining  and 
selling  Schuylkill  coal. 

The  conditions  of  the  circular  and  control  of  the  coal  as  herein 
stated,  are  our  virtual  expulsion  from  your  wharves,  and  our  being 
driven,  after  long  years  of  active  labor,  suddenly  from  the  business 
at  Richmond." 

This  gentlemen  who,  for  nineteen  years,  had  been  connected  with 
this  business,  was  driven  out  of  the  business  so  suddenly  that,  as  he 
himself  tells  you,  had  it  not  been  that  he  had  some  provision  made 
for  his  family,  he  would  have  had  to  go  to  the  almshouse.  The  Presi- 
dent of  the  Company  when  approached,  not  by  this  gentleman  but  by 
a  friend  of  his,  and  asked  whether  he  (Van  Dusen )  could  not  be 
allowed  to  retain  his  wharf  said  (referring  to  the  middlemen  of  whom 
he  has  spoken  here  with  so  much  of  bitterness)  :  "Tell  Mr.  Van  Dusen, 
we  want  him  and  men  like  him  for  the  purpose  of  selling  our  coal." 
I  allude  now  to  the  testimony  of  Mr.  Rommel.  This  "middleman" 
and  the  men  like  him,  were  the  men  that  were  wanted  for  the  purpose 


62 

of  selling  this  coal  until  the  combination  got  fully  under  way.  Now, 
another  "middleman"  was  Mr.  Borda.  This  gentleman  had  been 
connected  with  the  trade  in  every  imaginable  way.  He  had  been  an 
engineer,  an  operator,  a  factor,  a  shipper,  and  had  a  large  business. 
His  tonnage  from  Port  Richmond  in  the  year  1872  was.  I  think — the 
gentleman  will  correct  me  if  I  am  wrong — 140,000  tons.  That  would 
pay  $280,000  of  tolls  to  the  Reading  Kailroad  Company  a  year. 

This  gentleman,  it  appears,  is  in  business  there  yet.  He  has  been 
alluded  to  as  having  interfered  in  the  management  of  these  companies, 
but,  sirs,  1  say  that  he  deserved  honor  for  his  course,  and  I  would 
there  were  more  men  like  him  in  the  community  who,  almost  alone  of 
those  who  are  in  that  business,  and  with  a  business  in  competition 
with  these  corporations  and  in  their  power,  dares  to  stand  up  and 
oppose  them.  He  has  been  accused  of  interfering  in  the  management 
of  the  companies,  and  a  letter  was  read  to  you  in  support  of  the  alle- 
gation. I  have  some  hesitation  in  alluding  to  the  matter  at  all,  and 
yet  it  does  seem  to  me  to  be  only  fair  and  proper,  by  way  of  an  answer 
to  what  has  been  said,  to  state  the  fact,  and  I  speak  that  which  I  do 
know,  for  it  is  a  fact  within  my  own  personal  knowledge,  and  I  thought 
it  was  known  to  the  learned  counsel  for  the  defence — that  that  letter 
and  the  plan  therein  proposed,  was  not  the  plan  of  the  gentleman 
who  signed  that  letter  at  all,  but  was  so  written  and  prepared  at  the 
direct  suggestion  of  one  of  the  largest  stockholders  in  the  Reading 
Road — one  of  those  "two  Irishmen  and  one  Scotchman"  that  we  have 
heard  something  about.  It  was  written  for  him,  and  was  simply  trans- 
posed into  his  language  and  signed  by  him.  Rut,  sirs,  this  gentleman 
is  safe  in  his  business.  Some  merit  has  been  claimed  here  for  the 
fact,  that  a  man  who  is  opposed  to  the  company  can  yet  do  business 
with  them  and  can  still  live.  Why  it  would  be  a  most  monstrous 
thing  if,  when  I  wanted  to  come  to  this  place,  I  should  be  denied  the 
right  to  come  by  railroad,  and  be  obliged  to  come  down  on  horseback, 
because  I  did  not  happen  to  be  on  friendly  terms  with  the  President  or 
management  of  this  Camden  and  Atlantic  Railroad  Company.  Where 
would  we  be  if,  when  we  wanted  to  transact  our  daily  business,  and  to  go 
hither  and  thither  as  we  are  called,  we  had  first  to  inquire  whether 
there  was  some  gentleman  whom  we  knew  or  did  not  know,  or  with 
whom  we  had  or  did  not  have  some  difficulty,  who  controlled  the  avenue 
to  that  place?  Of  course  Mr.  Borda  is  in  no  danger,  these  gentlemen 
are   but  the  servants  of  the  public,  they  are  bound  to  carry  for  who- 


63 

ever  demands  the  use  of  their  facilities  and  will  pay  for  thein.  With 
reference  to  these  commissions  and  charges  that  have  been  made  by 
these  gentlemen,  these  factors,  and  which  have  been  the  subject  of  bo 
much  animadversion  here,  I  find  by  the  testimony  they  appear  to  be 
these :  These  gentlemen  get  a  guarantee  commission  of  from  twenty  to 
twenty-five  cents  per  ton  on  the  larger  sizes  of  coal  sold,  and  from  ten 
to  fifteen  cents  per  ton  on  the  smaller  sizes  of  coal  sold.  This  business 
of  dumpage  and  over-weight  that  we  have  heard  about — all  that  was  a 
mere  matter  of  arrangement  between  the  miner  and  the  shipper.  No 
man  was  compelled  to  go  to  any  particular  wharf  or  any  particular 
factor.  These  wharves  were  big  enough  to  accommodate  the  whole 
trade  and  more  too.  Why,  you  gentlemen  saw  when  you  went  up 
there,  that  these  wharves  at  the  upper  end  of  the  Richmond  yard,  the 
smaller  wharves,  were  occupied  by  the  individual  coal  dealers,  by  these 
gentlemen  who  are  still  left  in  the  business,  whose  tonnage  has  been 
so  cut  down  that  they  can  get  along  with  a  smaller  wharf;  but  the  big 
wharves,  the  very  wharves  that  these  men  had  previously  occupied, 
are  now  occupied  by  the  Reading  Company,  and  that  several  of  them, 
a  considerable  proportion  of  them,  were  lying  there  with  very  little 
doing.  We  saw  the  bins  with  very  little  coal  in  them,  the  tracks 
apparently  unused.  That  was  the  case  with  two  or  three  wharves  at 
all  events,  and  I  think  it  was  the  case  with  a  great  many  odd  bins 
all  the  way  through.  You  had  the  same  opportunity  to  observe  these 
things  that  I  had,  and  you  can  correct  me  if  I  am  mistaken. 

Now,  this  matter  of  over-weight  and  these  dumpages  were  mere 
matters  of  arrangement.  The  Reading  Company  charged  so  much  a 
ton  fur  putting  the  coal  in  the  vessel,  and  would  not  permit  this  to  be 
done  except  by  their  own  employees.  We  have  not  a  word  to  say 
against  that;  that  may  have  been  all  proper  enough,  possibly  there 
were  good  reasons  for  it.  They  made  a  charge  for  that,  and  the 
amount  of  that  charge,  and  the  amount  of  the  over-weight,  was  known 
to  the  operator,  as  was  also  the  amount  of  dumpage,  and  he  could 
have  his  choice  of  paying  the  charge  and  taking  the  over-weight  and 
dumpage,  or  giving  the  over  weight  and  dumpage  to  the  shipper,  and 
the  latter  paying  the  charge  for  loading  the  coal  on  the  vessels.  There 
was  no  compulsion  about  the  factor's  charge;  and.  after  all,  if  the 
miner  or  operator,  as  he  is  called,  did  not  want  to  deal  with  the  factor, 
he  could  be  his  own  factor  and  deal  with  himself.  So  that  we  will 
leave  all  that  out  and  come  down  to  this  guarantee  commission  of  *J0 


64 

to  25  cents  a  ton  on  the  large  sizes,  and  10  to  15  cents  a  ton  on  the 
small  sizes.  Ah,  that  was  an  outrageous  thing !  Just  think  of  it — 25 
cents  a  ton  !  Why  the  exclamation  of  the  gentleman  on  the  other  side, 
as  he  dwelt  upon  this  monstrous  charge,  were  almost  like  the  learned 
counsel's  allusions  to  the  warming-pan  in  Pickwick. 

Gentlemen,  THE  HEADING  COMPANIES  WERE  GOING 
TO  DO  THIS  FACTORS  BUSINESS  FOR  TEN  CENTS  A 
TON,  and  were  going  to  enter  into  a  fair  competition  with  these 
middlemen  ;  and  by  virtue  of  the  fact  that  they  would  do  for  ten  cents 
what  these  gentlemen  charged  from  ten  to  twenty-five  cents  for,  they 
were  going  to  gain  their  customers  from  them.  Now,  did  they  go  into 
a  fair  competition  ?  Let  us  see  h&w  this  thing  worked,  because  it  is 
very  important,  and  I  ask  your  particular  attention  to  it.  The 
company  was  to  do  it  for  ten  cents  and,  as  you  recollect,  they  proposed 
to  the  operators  very  kindly  and  generously,  as  they  said  that  they 
could  keep  their  wharves  and  do  a  business  of  the  same  proportion  of 
tonnage  that  they  had  theretofore  done,  provided  that  they  would  do 
it  for  ten  cents  a  ton.  Now,  I  had  the  curiosity  to  compare  the  com- 
panies' figures  and  any  of  you,  gentlemen,  can  compare  them  after  me 
as  I  read  them  to  you  from  the  testimony  and  their  circular  price 
lists.  In  March,  1873,  when  this  "pool"  arrangement  opened,  they 
paid  the  pool  $2.60  a  ton  for  their  coal,  at  Port.  Carbon.  They 
charged  other  people — and  therefore  they  are  entitled  to  that  charge 
or  credit,  whichever  you  may  call  it — $2  per  ton  tolls  or  freights  from 
Port  Carbon  to  Port  Richmond  ;  and  therefore  the  coal  cost  them,  to 
deliver  on  board  at  Port  Richmond,  not  less  than  $4.60  a  ton.  But 
when  they  commenced  this  competition,  they  delivered  coal  on  board 
at  Port  Richmond,  as  you  will  see  by  their  price  lists,  at  $4.30  a  ton. 
In  other  words,  they  lost  30  cents  a  ton  then.  Well,  they  went  on  ; 
but  that  was  the  way  that  they  started.  In  December,  when  the 
shipping  season  of  that  year  had  closed,  they  had  their  grasp  more 
firmly  upon  the  operators  of  Schuylkill  and  the  price  had  gone  up. 
In  December,  they  paid  the  pool  $2.95  a  ton ;  their  freights  were  $2 
a  ton;  that  made  $4.95.  They  charged  for  the  delivery  on  board  the 
vessel  at  Port  Richmond,  $5  a  ton  and  there  made  a  profit  of  5  cents 
a  ton.  That  was  only  one-half  of  what  they  were  going  to  ask.  You 
will  see  that  the  operators  got  35  cents  per  tou  more  in  December  than 
they  did  in  March,  but  that  the  company  got  seventy  cents  more  in 
December  than  they  did    in  March ;  of  the  advance  in  the  price,  these 


65 

companies  took  twice  as  much  as  they  gave  the  operators.  Now,  in 
April,  1874,  when  their  shipping  season  again  commenced  and  when 
they  had  the  thing  more  firmly  than  ever  in  their  own  hands,  they 
paid  the  pool  $2.70.  Their  freights  being  82  per  ton,  that  made 
84.70  ;  and  they  delivered  it  for  84.90.  Then  they  made  a  profit  of 
twenty  cents  a  ton.  and  that  was  just  double  what  they  started  out  to 
make.  Thus  with  the  lapse  of  a  single  year,  this  ten  cents  a  ton  had 
swollen  to  twenty  cents  a  ton,  and  at  the  close  of  1874 — in  December, 
1874 — they  paid  the  pool  S3. 40  a  ton  ;  their  freights  were  82  a  ton, 
which  made  85.40  a  ton,  but  they  then  charged  for  it  at  85.90  a  tou, 
delivered  at  Port  Richmond.  In  other  words,  THEY  MADE 
FIFTY  CENTS  A  TON— JUST  DOUBLE,  in  two  years  run  of 
this  business,  THE  HIGHEST  THAT  THESE  AWFUL  FACT- 
ORS HAD  EVER  DARED  TO  CHARGE,  and  five  times  as  much 
as  they  advertised  they  would  do  the  business  for  when  they  started  in 
this  "fair"  competition. 

Why,  sirs,  that  very  table  published  by  themselves  shows  you  what 
has  been  the  effect  of  this  thing.  They  started  in  fair  competition,  as 
they  call  it,  and  did  the  business  at  a  loss  of  thirty  cents  a  ton,  but 
from  March,  1873,  to  December,  1874,  they  had  changed  that  result 
from  thirty  cents  on  the  loss  side  to  a  profit  of  fifty  cents  per  ton,  or 
double  the  amount  which  Mr.  Borda  or  Mr.  Van  Dusen  had  ever 
asked  anybody.  These  gentlemen  had  offices  in  New  York  and 
Boston,  in  Baltimore  and  Washington,  besides  their  home  offices  in 
Philadelphia,  with  all  the  necessary  book-keepers,  clerks  and  salesmen 
engaged  for  this  very  business  of  selling  their  consignors  coal,  and 
for  that  service  and  expense  they  received  from  ten  to  twenty-five 
cents  commissiou,  but  this  Reading  Coal  and  Iron  Company  had  all 
their  offices  and  employees  already  engaged,  as  the  gentleman  himself 
admits,  they  were  not  at  a  dollar  of  additional  expense,  and  yet  they 
charge  and  collect  fifty  cents  a  ton  for  this  very  service. 

Well,  sirs,  another  feature  of  this  dreadful  experience  of  the 
Railroad  Company  that  we  have  heard  of,  and  another  reason  or 
excuse  for  the  formation  of  this  combination,  was  that  there  was  a 
combination  of  the  retailers.  That  was  a  dreadful  state  of  circum- 
stances. I  want  to  say  very  little  upon  this  subject,  because  it  has 
been  fully  adverted  to  by  my  friend  in  opening  the  case,  and  was  dis- 
cussed by  the  gentleman  on  the  other  side.  The  reasons  given  had 
no  existence,  THE  FACT  WAS  PROVEN  THAT  THERE  WAS 


66 

NO  COMBINATION  OF  RETAILERS.  You  will  recollect  that 
when  the  taking  of  the  testimony  was  commenced,  the  first  question 
that  was  asked  our  witnesses  on  the  stand  on  cross  examination  was, 
"  Do  you  helong  to  the  Retail  Coal  Dealers'  Association?"  Some  of 
them  said  "yes,"  some  said  "no,"  and  some  said  there  was  no  such 
thing.  We  did  not  understand  these  answers,  and  I  asked  Mr.  Ellis 
Branson  about  the  association  and,  upon  his  giving  me  the  information, 
I  asked  him  to  come  upon  the  stand  and  tell  you,  gentlemen,  what  he 
had  told  me.  It  then  turned  out  that  this  terrible  combination  of 
retail  coal  dealers  had  been  an  association  of  less  than  one-third  of  the 
trade,  with  a  treasury  made  up  by  the  payment  of  $1;^,  a  year  dues,  for 
the  expenses  of  a  room  to  meet  in,  who  had  met  together  for  the  pur- 
pose of  going  before  you  gentlemen  at  Harrisburg,  and  getting  a  law 
passed  by  which  the  carts  from  which  the  coal  is  sold  might  be 
inspected,  so  that  full  weight  should  be  insured  and  gentlemen  like  the 
Messrs.  Branson  should  not  be  driven  out  of  business  by  dishonest 
competition,  that  that  was  the  whole  object  of  the  Retail  Coal  Dealers 
Association,  that  they  had  not  held  a  meeting  for  eighteen  months; 
and  that  at  the  meeting  they  then  held  there  was  not  a  quorum,  and 
they  had  adjourned  to  meet  whenever  nine  members  thought  it  was 
necessary;  and  that  nine  members  never  have  thought  it  was  necessary 
from  that  day  to  this.  That  wound  up  the  Retail  Coal  Dealers'  Asso- 
ciation, and  we  heard  no  more  questions  about  it.  And  then  we  came 
to  the  subject  of  their  prices,  and  upon  that  we  have  heard  a  great 
deal.  But  let  me  mention  to  you  here,  gentlemen,  a  circumstance  that 
is  to  be  taken  into  consideration  in  this  question  of  prices,  namely, 
that  much  depends  upon  the  colliery  from  which  the  coal  comes,  much 
depends  upon  its  state  of  preparation,  much  depends  upon  the  size  of 
the  coal,  and  upon  a  great  many  different  things.  There  was  no 
uniform  price  among  the  coal  dealers  themselves.  As  has  been  stated 
before  you  and  as  you  very  well  know,  any  man  could  go  into  the 
business ;  all  that  a  party  required,  as  was  admitted  by  my  friend  on 
the  other  side,  was  to  get  an  endorser  for  his  one  week's  or  two  weeks' 
freight  bill.  The  business  was  open  to  unlimited  competition,  and 
many  men  who  had  broken  down  in  other  businesses  went  into  it. 
Prices  varied  in  it,  there  was  and  and  is  no  uniform  standard  by  which 
you  can  estimate  them.  When  the  gentlemen  spoke  of  how  low  the 
prices  of  the  Coal  and  Iron  Company  were  as  compared  with  those  of 
the  retail  coal  dealers,  I  recollected  that  on  the  very  same  page  of  the 


67 

paper  containing  the  very  eloquent  opening  that  was  made  for  the 
defence,  I  had  seen  the  publication  of  the  prices  of  the  Philadelphia 
and  Heading  Coal  and  Iron  Company,  in  which  stove  and  small  stove 
coal  was  put  down  at  $6.85  per  ton  delivered;  and  I  recollected  that 
Mr.  Kersey  had  testified  that  his  price  for  stove  coal  delivered  was  $7- 
Well,  they  are  within  fifteeu  cents  of  Mr.  Kersey's  price  now ;  and  if 
we  take  the  developments  of  the  past  as  to  the  manner  of  conducting 
this  "  pool  "  business  as  an  indication  of  our  probable  experience  in 
the  future,  particularly  as  to  the  way  in  which  the  company  got  rid  of 
the  twenty-five  cents  per  ton  which  the  factors  made,  by  charging  fifty 
cents  per  ton  themselves,  it  will  not  be  a  very  great  while  before  that 
difference  of  fifteen  cents  is  fully  made  up. 

Another  subject  to  which  I  would  invite  your  attention  is  that  of 
the  power  of  this  railroad  and  coal  corporation.  I  do  not  stand  before 
you  to  eDgage  in  any  denunciation  of  corporations  in  general.  I  am 
arguing  this  case  upon  its  merits,  and  I  desire  to  say  nothing  but  that 
which  is  applicable  to  it,  and  to  speak  only  of  the  record  before  you ; 
but  it  is  fair  and  proper  for  me  to  say  something  about  the  power  of 
these  two  particular  corporations.  A  great  deal  has  been  said  upon  a 
matter  to  which  I  would  not  now  allude,  had  it  not  been  spoken  of  by 
the  gentleman  for  the  defence,  viz. :  the  interview  in  December,  1872, 
when  this  pool  was  proposed,  and  when  the  gentleman  offered  to  handle 
the  operators'  coal  for  ten  cents  a  ton.  You  will  recollect  it  was  stated 
that  when  his  proposition  was  not  acceded  to,  Mr.  GOWEN  "got 
ugly"  and  was  "AGGRAVATED  BY  OPPOSITION.''  We  have 
all  had  more  or  less  intercourse  with  Mr.  Gowen,  and  I  think  we  can 
all  say,  that  personally  and  as  an  associate,  there  are  very  few  men 
whose  company  we  would  prefer  to  his.  When  it  was  said,  therefore, 
that  he  had  'GOT  UGLY,"  something  else  must  have  been  meant 
than  that  Mr.  Gowen  was  simply  angry,  or  was  "aggravated  by  oppo- 
sition," as  one  of  their  own  friends  stated  to  you.  What  was  meant 
by  that  expression?  Why,  sirs,  as  Mr.  Thomas  has  stated  to  you,  the 
coal  operators  regarded  it  as  "THE  SULLEN  MURMURINGS  OF 
A  POWERFUL  CORPORATION,"  and  it  was  that  which  alarmed 
those  men  The  fact  that  Mr.  Gowen  "got  ugly,"  or  that  he  was 
"aggravated  by  opposition,"  or  that  he  "had  a  threatening  manner," 
had  a  special  significance  and  was  of  ominous  import,  when  it  was 
understood  that  he  spoke  with  the  whole  power  of  these  corporations 
behind   him,  and   these  men  felt  that  what  he  was  saying  and  doing 


68 

was  not  merely  his  own  volition,  but  was  the  utterance  and  the  act  of 
the  Reading  Railroad  Company.  Well,  now  what  does  the  gentleman 
say?  Sirs,  he  admits  that  this  understanding  or  interpretation  was 
correct.  "Why,"  he  says,  "gentlemen,  did'nt  I  tell  you  I  would 
protect  you."  Time  and  time  again  he  asked  the  witnesses  that  ques- 
tion. He  has  even  stated  here,  and  did  so  day  before  yesterday,  when 
alluding  to  the  fact  that  he  had  received  letters  from  people  who  had 
been  subpcened  and  who  said  that  they  did  not  know  anything  about 
the  case,  that  he  had  said  to  them,  "You  can  come — tell  all  you  know 
— we  won't  punish  you."  The  idea!  "Upon  what  meat  doth  this,  our 
Cesar  feed,  that  he  hath  grown  so  great?"  Why,  sirs,  punish  a  man 
for  coming  to  testify  to  the  truth  in  a  Court  of  justice !  Protect  a  man 
in  his  business,  in  that  which  makes  your  business,  and  upon  which 
you  are  as  dependent  for  your  profits  as  he  is  for  his  livelihood !  This 
very  circumstance,  trifling  as  it  is,  shows,  as  does  a  feather  the  way 
the  wind  blows,  and  indicates  the  enormous  power  of  these  corporations. 
Then,  too,  it  is  in  testimony  before  you,  that  this  company  has  said 
that  it  can  make  up  in  six  month's  time  all  that  it  has  lost  by  six 
month's  idleness  of  the  miners,  the  operators  and  people  dependent  on 
them.  Can  these  latter  do  that?  No.  Can  the  company  do  it?  Yes. 
Why?  Because,  as  has  been  stated  to  you  by  one  of  their  warmest 
friends,  and  one  of  those  gentleman  whom  my  friend  thought  we  were 
sorry  we  had  called,  but  whom  I  think  to  have  been  one  of  our  best 
witnesses;  I  allude  to  Mr.  Neill,  because  THESE  COMPANIES 
CAN  EXTORT  WHAT  TERMS  THEY  PLEASE. 

Now,  sirs,  do  they  use  this  power?  Here  I  want  to  repeat  what  I 
stated  in  the  beginning,  that  I  do  not  believe — and  I  do  not  stand  here 
to  charge  or  insinuate  but  expressly  deny — that  anything  that  is  done 
by  that  company,  or  by  any  official  of  that  company,  is  for  the  private 
benefit,  direct  or  indirect,  in  any  way,  manner  or  form,  of  any  officer 
or  employee  of  it:  it  is  for  the  company  alone.  But  the  company 
alone  does  make  use  of  this  power.  Seven  witnesses  have  stood  before 
you  and  testified  to  the  fact  that  they  could  not  get  cars  at  times  when 
the  Coal  and  Iron  Company  did  get  cais;  that  theirs  were  then  on 
the  road ;  that  their  way  bills  had  been  received  and  their  freights 
paid;  that  they  saw  the  company's  cars  taken  out  of  the  train  and  run 
into  the  company's  yard,  and  their  own  cars  (the  cars  of  the  witnesses) 
left  upon  the  siding.  The  colliers,  you  are  told  by  the  very  operators 
themselves  who  are  so  unfriendly  to  us,  the  colliers,  you  are  told,  are 


69 

used  by  them  exclusively  and  do  not  always,  at  all  events,  transport 
for  individuals,  but  frequently  refuse  to  do  so.  And  when  asked  why 
was  this,  the  gentleman  for  the  other  side  replied,  :<Is  there  any  obli- 
gation in  our  charter  to  compel  us  to  carry  your  coal  in  our  colliers  ?" 
Now.  as  to  that,  gentlemen  of  the  committee,  I  ask  any  of  you  who 
are  lawyers,  whether  any  such  thing  can  be  conceived  of  by  the  legal 
mind,  as  a  common  carrier,  by  land  or  by  water,  who  is  not  obliged  to 
carry  for  whoever  offers  to  pay  the  freight.  They  are  bound  to  carry, 
and  their  colliers  and  their  water  transportation  business  are  just  as 
much  a  part  of  their  business  as  common  carriers,  as  their  tracks  and 
their  cars.  Yet  they  have  refused  to  do  so.  Again,  THEY  HAVE 
REFUSED  TO  SELL  COAL  TO  PARTICULAR  PERSONS. 
That  may  seem  a  very  trifling  thing,  but  at  the  same  time,  gentlemen, 
if  you  carry  that  out  to  its  logical  conclusion,  what  is  the  result?  Are 
they  to  be  entitled  to  say  they  will  sell  to  me  and  will  not  sell  to  you, 
or  that  they  will  sell  to  you  and  will  not  sell  to  me  ?  Where  is  the  man 
who  is  left  out  in  the  cold — what  is  he  to  do?  Three  or  four  witnesses 
testified  to  that  very  condition  of  things;  and  one  of  them,  a  witness 
who  is  entirely  unimpeached  in  any  way — Mr.  Kepner — was  asked 
(and  he  specified  the  name  of  the  very  gentleman  whom  he  asked  to 
sell  him  the  coal) — he  was  asked,  "was  not  that  during  the  strike?" 
uOh,  no.  it  was  not,"  said  Mr.  Kepner;  "it  was  at  such  and  such  a 
time,  and  long  before  the  strike." 

Then  again — to  come  back  to  this  very  factor  interest — you  have  the 
testimony  of  Mr.  Rorda  that  he  had  bought  a  lot  of  coal,  and  was 
taking  all  they  could  turn  out  from  one  of  the  collieries  that  was  in  the 
pool,  and  they  were  stopped  from  sending  it  to  him.  And  again,  some 
Lehigh  and  Wilkesbarre  coal,  20,000  tons,  that  he  had  made  a  contract 
to  sell  for  that  coal  company  on  commission,  was  taken  away  from  him, 
at  the  command  and  by  the  power  of  this  company,  supported  by  these 
combinations. 

Another  thing  is  this  rule  which  we  may  call  the  TWO  COLLIERY 
RULE.  I  can  hardly  believe  that  the  gentleman  supposed  that  what 
he  said  in  relation  to  that  was  any  answer  to  the  testimony  on  this  point. 
The  rule  was  this:  it  was  a  new  rule  made  since  the  Reading  Company 
had  become  a  miner:  that  where  a  company  or  person  had  more  than 
one  colliery,  he  could  get  all  his  cars  for  all  his  collieries,  or  for  two  or 
more  of  them  sent  to  any  one  particular  colliery.  When  there  was  a 
reduction,  then  those  gentlemen  who  had  two  collieries,  or  this  company, 


70 

which  had  thirty-eight  collieries,  could  still  keep  some  of  their  collieries 
running  at  their  full  capacity,  while  the  others,  the  very  great  majority, 
who  had  but  one  colliery,  could  not,  Now,  how  did  that  work  practically 
and  as  a  matter  of  business?  You  will  recollect,  Mr.  Hunt/inker's  testi- 
mony in  relation  to  the  iron  men.  It  was  this:  Iron  men  require  a 
particular  kind  of  coal  suitable  to  their  furnaces.  It  must  burn  with 
the  blast  which  they  have.  Secondly,  they  do  not  want  to  mix  it. 
because  different  coals  have  different  proportions  of  sulphur  or  phosphorus, 
and  to  mix  them  may  injure  the  iron.  Therefore  and  for  those  reasons 
they  want  it  steadily  as  they  have  ordered  and  expected  it.  because  every 
one  knows  the  very  great  loss  that  ensues  if  they  have  to  blow  out  their 
fires. 

Now  then,  gentlemen,  before  the  Coal  and  Iron  Co.  was  in  existence, 
all  these  iron  works  ran;  they  made  their  contracts  with  individual 
collieries  and  they  could  get  the  coal  they  wanted  and  had  ordered. 
because  the  collieries  could  get  the  cars  to  fill  their  orders,  but  when 
these  car  detentions  we  have  heard  of,  and  of  which  I  shall  presently 
speak,  commenced,  it  often  happened  they  had  difficulty  to  get  the 
coal  they  wanted  from  individuals,  and,  under  this  new  rule,  many  of 
them  had  to  leave  their  individual  collieries  and  had  to  go  to  the  Coal 
and  Iron  Company.  Why?  Because,  for  instance,  if  I  had  a  colliery 
which  could  ship  50.000  tons,  and  I  had  made  my  contracts  with  an  iron 
manufacturer  on  that  basis,  then  when  there  was  a  curtailment  in  the 
supply  of  cars,  I  could  only  send,  say  one-half  the  quantity  ordered  and 
which  I  had  agreed  to  send,  because  I  could  not  get  the  cars  to  send  it  in. 
But  this  company,  having  more  than  one  colliery,  and  one  of  which 
would  suit  this  party  just  as  well  as  mine,  could  turn  all  their  cars  into 
that  colliery  and  could  fill  that  contract,  Therefore,  he  would  have  to 
leave  me  and  go  to  them.  Now.  that  was  the  way  in  which  that  rule 
worked,  and  in  consequence  of  it,  many  iron  masters  were  compelled  to 
give  up  the  individual  operators  with  whom  they  had  been  dealing, 
because  they  were  unable  at  all  times  to  fill  their  orders  by  reason  of  the 
curtailment  of  the  cars,  and  go  to  the  Reading  Company  for  their  coal 
because  they  were  always  able,  notwithstanding  these  curtailments,  by 
virtue  of  this  two  colliery  rule,  to  ship  all  the  coal  that  was  required 
from  any  one  of  their  collieries. 

We  now  come  to  this  QUESTION  OF  THE  COMBINATION. 
The  first  effect  of  the  existence  of  that  combination  was  the  taking  off 
of  the  five  per  cent,,  and  the  taking  off  of  the  five  per  cent,  of  course 


71 

correspondingly  raised  the  price — you  and  I,  and  everybody,  had  to  pay 
five  per  cent,  more  for  coal  than  we  had  to  pay  previously.  And  here 
let  me  notice  the  fact  that  a  great  deal  has  been  said  upon  this  subject 
of  freight  ;  and  I  shall  only  touch  upon  that  subject  by  saying  this, 
incidentally  to  the  taking  off  of  that  five  per  cent.,  that,  as  soon  as  this 
Philadelphia  and  Reading  Railroad  Company  undertook  to  give  true 
weight  or  exact  weight,  I  say  they  tailed.  I  do  not  mean  to  say  from 
tin-  testimony  that  they  have  intentionally  given  one  man  short-weight 
and  another  man  over-weight;  but  I  do  say  this,  that  in  the  hurry 
necessarily  incident  to  their  business,  the  coal  could  not  be  weighed 
accurately.  And  they  themselves  admit  this,  because  whenever  any  of 
these  complaints  of  short-weight  were  made,  they  answered  the  com- 
plainants by  saying,  "we  think  you  will  find  that  the  overs  exceed  the 
shorts."  Now.  when  you  weigh  a  thing,  you  want  to  know  the  exact 
weight;  the  very  purpose  of  weighing  is  to  get  accuracy;  and  therefore 
this  inaccuracy  which  had  theretofore  been  covered  by  the  five  per  cent. 
was  now  endured  by  anybody  upon  whom  it  happened  to  fall;  and  some- 
time- it  fell  on  some  persous  onerously,  while  others  may  ha\re  been 
benefitted  by  it.  Their  own  testimony  shows,  taking  their  own  tables  as 
to  the  result  at  Poit  Richmond,  that  while  Mr.  Lewis  Snyder  got 
only  ,J,s  of  one  per  cent,  over-weight,  the  Reading  Coal  and  Iron 
Company  got  21!&a  of  one  per  cent,  over-weight.  While  Mr.  Snyder  got 
almost  exact  weight,  the  latter  got  nearly  2*  per  cent,  over-weight. 
What  chance  had  Mr.  Snyder  in  competition  with  the  company  ?  You 
see  it  did  not  operate  fairly  all  around,  and  therefore  it  is  that  these 
uentlenien  ought,  and  I  have  no  doubt  that  they  will,  and  I  think  that 
you.  gentlemen,  should  see  that  they  do,  hereafter  take  some  steps  by 
which  a  more  liberal  weight  may  be  insured,  and  that  coal  which  is 
suspected  of  being  '-short."  may  be  weighed  by  some  proper  authority 
before  the  purchaser  is  compelled  to  take  it.  Now,  this  "combination," 
while  its  existence  is  admitted  here  and  need  not  be  argued,  is  a  some- 
what complex  thing,  and  I  must  ask  your  particular  attention  while  I 
endeavor  to  show  you  exactly  how  it  was  that  it  was  brought  about  and 
operated.  When  these  gentleman  of  the  Reading  Companies  became 
converts  to  the  theory  that  carrying  companies  should  also  be  coal  pro- 
ducers, this  combination  of  six  companies  was  formed;  and  by  that 
combination,  as  you  have  seen,  it  was  provided  that  the  tonnage  should 
be  distributed  pro  rata  among  the  different  companies  to  be  sold  at  a 
certain    price    agreed    upon,    commencing    at    one    figure    and    steadily 


72 

advancing  through  the  year.  Now,  you  can  yourselves  see  how 
necessarily  that  involved  a  control  of  production.  Each  region  was  to 
sell  a  certain  per  centage  of  the  whole  amount  of  coal  sold;  the  total 
sale  being  fixed  at  a  certain  figure  to  commence  with,  and  being 
curtailed  by  the  committee  whenever  in  their  opinion  the  market  would 
not  take  their  coal  at  the  price  they  had  agreed  upon. 

You  will  see  by  reference  to  the  "  Engineering  and  Mining  Journal." 
(New  York,  December  19th.  1874.  p.  392,)  not  only  the  percent  ■. 
which  were  originally  allotted,  but  the  percentages  according  to  the 
amended  quotas  as  they  went  along,  and  the  exact  amount  of  their  dif- 
ferent shipments.  The  companies  other  than  the  Reading  were  at  that 
time  in  this  position.  They  had  control  of  their  own  regions  entirely  and 
supplied  their  own  lines;  the  Pennsylvania  Coal  Company,  for  instance, 
had  a  monopoly  along  the  line  of  the  Erie  Railroad,  because  they  were 
the  only  company  shipping  along  that  road:  the  Delaware.  Lackawanna 
and  Western  had  a  control  over  the  line  of  its  road,  they  had  a  monopoly 
there  until  they  got  to  a  competitive  point,  and  so  on  with  the  others. 
Now,  as  you  will  understand,  gentlemen,  in  mining  coal,  as  has  been 
testified  to  before  you,  it  is  necessary  that  the  mines  should  work  as 
nearly  to  their  full  capacity  as  possible,  otherwise  there  will  be  a  loss. 
These  companies  working  these  mines  would  supply  their  own  line  trade, 
and  their  surplus,  or  whatever  of  their  coal  was  over  the  supply  needed 
by  their  line  trade  would  go  to  the  seaboard  to  be  sold  East  or  South. 
But  while  all  the  others  had  control  of  the  mines  of  their  own  regions, 
the  Reading  Company  did  not  control  the  mines  of  its  own  region.  The 
other  companies  could  say,  "we  have  got  enough  to  supply  our  line 
trade,  we  have  sent  to  the  seaboard  enough  to  supply  our  quota  of  the 
agreed  amount  to  go  to  competitive  points,  now  we  will  stop."'  But  the 
Reading  Companies  could  not  say  this,  because  they  had  in  their  own 
region  a  large  number  of  individual  operators,  and  therefore  they — did 
what?  In  the  first  place,  they  formed  this  "pool."  I  do  not  believe 
that  the  object  of  that  pool  was,  as  has  been  pretended,  to  make  the  ten 
cents  which  has  now  been  multiplied  by  five  and  has  grown  to  fifty  cents 
per  ton  on  the  coal,  but  its  object  was  this,  that  the  Reading  Company 
could  have  all  the  coal,  or  so  large  a  proportion  of  it  that  it  was 
substantially  all  the  coal,  that  came  over  its  road  to  Port  Richmond, 
and  thereby  they  could  have  control  of  all  the  coal  that  came  from  the 
Schuylkill  region  to  tide-water,  whether  it  was  more  or  less  than  or  equal 
to  their   quota.     You  yourselves  heard  this  from  one  of  the  witnesses 


73 

who  had  a  lot  of  coal — lump,  steamboat,  or  something  of  the  kind — 
that  the  pool  did  not  want,  because  the  pool  had  their  quota ;  it  was 
for  this  reason  they  did  not  want  it  and  they  said.  "  don't  send  us  any 
more,"  and  then  the  witness  tried  to  sell  it  through  Mr.  Borda,  and  then 
he  was  stopped.  But  the  reason  for  this  was,  as  I  have  stated,  that 
they  were  obliged  to  have  the  control  of  the  coal  that  came  to  the  sea- 
board, and  therefore  they  made  their  pool. 

Now,  the  next  thing  was  to  CONTROL  THE  OPERATORS  so 
that  they  should  not  produce  more  than  the  "quota."  How  was  that 
to  be  done?  Sirs,  I  will  show  you  to  a  certainty  that  it  was  done  BY 
THIS  SYSTEM  OF  CAR.  DETENTIONS  and  was  the  sole  end 
and  purpose  of  those  car  detentions.  "Why,"  they  say,  "these  car 
detentions  averaged  only  so  and  so,  and  amounted  to  but  very  little. 
Every  witness  called  on  that  point  testified,  I  think  without  exception, 
to  the  fact  of  these  detentions,  until  you,  gentlemen,  quite  tired  of  hear- 
ing it,  said  to  us  "  don't  call  any  more  witnesses  about  car  detentions, 
we  don't  want  to  hear  anything  more  about  it,"  just  as  you  had  already 
said  to  us  about  short- weights,  "the  thing  is  proved — now  let  us  hear 
the  explanation."  Now,  during  the  examination  of  the  witnesses,  (and 
I  ask  your  attention  to  this  particularly,  because  it  shows  whether  or 
not  this  car  detention  was  the  little  thing  that  they  now  try  to  make  it 
out  to  be,)  many  things  were  suggested  by  the  other  side  by  way  of 
explanation,  and  as  one  was  shown  to  be  untenable,  another  was  chosen  and 
advanced  as  explanatory  of  the  fact.  First  they  said,  if  this  did  happen,  it 
was  not  their  fault ;  and  you  will  recollect  that  when  some  of  the  gentlemen 
testified  they  could  not  get  their  coal,  that  they  had  paid  their  freights, 
that  the  cars  were  on  their  way  somewhere  between  Philadelphia  and  Potts- 
ville,  that  their  customers  were  demanding  their  coal  and  they  could  not 
get  any  coal,  they  went  down  to  the  railroad  office  and  asked  about  it  and 
were  told,  "well,  gentlemen,  there  is  some  mistake  about  it ;  the  operators 
could  not  have  informed  you  properly  about  it."  The  answer  to  that 
was,  "  here  is  my  receipt  for  the  freight ;  the  cars  are  on  your  road,  or 
else  you  could  not  have  sent  me  the  bill  for  the  freight."  "Well,  then," 
said  the  representative  of  the  company,  "the  cars  are  on  the  way,  and  I 
don't  know  where  the  coal  is."  One  of  the  witnesses  was  asked  this 
question,  "How  do  you  know  that  your  cars  were  loaded;"  "suppose 
the  cars  were  furnished  and  the  operator  did  not  load  and  send  you  the 
coal  you  ordered,  was  that  our  fault?"  But  the  answer  was,  that  the 
way-bill  had  been  received  and  consequently  the  car  must  have  been 


74 

loaded.  When  this  explanation  was  found  to  be  untenable,  they  next 
.said  to  the  witnesses.  "Do  you  order  cars;  did  you  ever  order  a  car  in 
your  life;  do  you  know  how  the  cars  are  distributed;  do  you  know  who 
the  district  despatchers  were;  did  you  ever  go  to  the  district  despatches  , 
do  you  know  anything,  of  your  own  personal  knowledge,  about  it?" 
And  then  they  objected  to  any  further  testimony,  upon  the  allegation 
that  it  was  hearsay;  and  that  was  ruled  out.  The  witnesses  could  only 
testify  that  they  had  ordered  coal,  paid  their  freights,  their  yards  were 
empty,  they  could  get  no  coal,  their  customers  were  asking  for  more  and 
threatening  to  go  to  the  Coal  and  Iron  Company,  and  in  some  instances  did 
go  there  and  get  it.  However,  this  testimony  was  stopped,  until  that  id' 
the  despatchers  could  be  had.  But  the  company  had  said  something 
about  blockades,  and  they  ventured  a  question  upon  that.  They  said, 
"Don't  you  know  that  blockades  happen  along  the  road?"  And  the 
witnesses  answered,  "Yes."  Now,  it  is  very  singular  that  they  never 
happened  before.  In  1S72,  or  theretofore,  there  had  occasionally  been 
a  delay  of  one  or  two  days  by  an  accident — that  might  happen  any- 
wheres, there  was  no  complaint  on  that  score  at  all — but  these 
blockades,  as  they  are  called,  had  not  happened,  these  large  numbers  of 
cars  had  not  been  stopped  before  this  year,  1873.  Then,  too.  they 
place  it  at  a  time  subsequent  to  the  panic:  "Since  the  panic  has  there 
not  been  a  blockade?"  they  ask.  Well,  it  turns  out  that  the  blockade 
was  before  the  panic,  and  that  the  blockade  commenced  in  the  winter  of 
1S7M,  and  was  all  through  1873  and  all  through  1874,  mure  or  less. 
Then  they  say  to  the  witnesses,  "Don't  you  know  this — that  if  a  coal 
car  goes  on  a  siding,  owing  to  a  blockade  or  anything  of  that  kind,  it 
has  to  stay  there,  that  the  through  trains  must  come  down,  and  that  the 
unfortunate  coal  that  gets  upon  a  siding  must  be  left  there,  until  such 
time  as  the  local  trains  get  there  and  take  it  oil'."'  Well,  the  witnesses 
did  not  know  anything  about  it,  but  they  thought  that  that  was  a 
reasonable  probability,  and  they  nodded  their  heads  affirmatively.  But. 
after  a  while,  along  conies  a  witness  who  says  that  his  coal  had  been  on 
a  siding  and  the  company's  coal  on  a  siding,  and  that  the  company 
received  their  coal  and  his  coal  did  not  come  through.  Then  they  tried 
another  tack  and  asked  him.  "  Don't  you  know  that  if  there  is  a 
blockade,  all  the  cars  go  on  the  siding  in  turn  tine  after  the  other;  that 
they  run  them  in  on  the  siding,  and  run  those  down  first  that  went  in 
first,  each  staying  an  equal  time  on  the  siding.'"  You  recollect  that. 
gentlemen,    and   you   see    how    utterly    incompatible    are    these   two 


75 

attempted  explanations.  Well,  then,  they  try  to  explain  this  thing  in 
their  reports  to  their  stockholders.  They  say  there  was  a  scarcity  of 
vessels  in  1873  (that  is  in  the  Report  of  January.  1874),  that  five  to 
seven-thousand  loaded  cars  were  standing  over  daily,  for  months  at  a 
time,  at  Port  Richmond,  owing  to  the  scarcity  of  vessels. 

Now,  gentlemen,  that  must  have  been  a  very  unusual  scarcity  of 
vessels,  so  unusual  that  since  18-42,  when  this  company  went  into 
business,  it  had  never  happened  before.  And  I  put  this  very  question 
to  a  number  of  witnesses,  who  said  that  they  had  owned  vessels  and 
had  transported  coal  by  vessels,  whether  there  'was  any  unusual 
scarcity  of  vessels  in  1873?"'  They  said,  "No,  nothing  but  what  there 
might  have  been  every  season."  "  But,  there  was  nothing  unusual?" 
"No;  nothing  unusual."  So  this  explanation  is  found  to  be  untenable, 
and  not  supported  by  the  facts.  Then  the  company's  next  explanation 
was  that  there  was  no  demand  for  coal.  Why,  gentlemen,  we  have 
shown  you  that  the  retailers  went  to  the  operators  to  ask  for  coal;  that 
the  operators  had  agreed  to  send  the  coal  and  that  the  factors  had  sold 
the  coal.  Mr.  Borda  had  vessels  that  he  could  not  load,  because  he 
could  not  get  the  coal.  .Air.  Borda  had  customers  whose  orders  he 
could  not  fill,  because  he  could  not  get  the  coal;  there  was  no  scarcity 
of  demand  as  far  as  any  of  the  witnesses  were  concerned,  they  all  with 
one  accord,  retailers,  factors  and  operators,  swore  on  the  witness  stand 
before  you  that  they  could  have  sold  more  coal  if  they  had  had  more 
ears  to  bring  it  to  market  in  the  years  1873  and  1874.  So  that 
attempted  explanation  fell  to  the  ground. 

Sirs,  THE  HEAL  EXPLANATION  is  easy;  the  fact  was  that 
THE  SCHUYLKILL  REGION  HAD  PRODUCED  ITS  QUOTA 
AND  therefore  the  Schuylkill  region  MUST  STOP.  That  is  the 
explanation  of  it.  Indeed,  I  may  ask,  what  other  explanation  can  be 
given?  The  reports  of  the  company  show  that  in  1870.  their  coal 
tonnage  was  -4.083,405  tons,  the  number  of  their  cars  was  19,420,  and 
there  was  a  suspension  for  four  and  a  half  months  ;  consequently,  in 
seven  and  a  half  months  of  that  year  they  transported  the  whole  of 
that  4,600,000  tons  with  19,400  cars. 

In  1871  their  production  was  almost  even  6,000,000  ton.  their  cars  were 
19,589  and  they  had  four  months'  suspension.  They  had  eight  months 
in  which  to  transport,  with  19,600  cars.  6,000,000  of  tons  of  coal.  In 
1872  their  coal  tonnage  was  0.185,-484  tons,  their  number  of  cars  was 
21,000,  and  there  was  no  suspension,  and  they  transacted  their  business 


76 

without  the  slightest  delay.  But,  in  1873  their  coal  tonnage  was 
6,546,000  tons  ;  they  had  23,000  cars,  and  had  all  these  blockades.  If 
they  could  transport  four  and  a  half  millions  with  19,000  cars  in  seven 
and  a  half  months,  I  think,  gentlemen,  they  could  have  transported  six 
and  a  half  millions  of  tons,  with  4.000  more  cars  to  do  it  with,  in 
twelve  months.  In  1874,  when  the  blockades  were  worse  still,  they 
transported  200,000  tons  less  of  coal,  and  they  had  more  care  or  the 
same  number  with  which  to  do  it.  Now,  there  is  no  explanation  to  be 
found  there.  They  had  the  cars ;  their  tonnage  had  not  grown  so 
rapidly  that  their  cars  did  not  keep  pace  with  it ;  there  was  never  a  time 
that  their  facilities  were  not  kept  equal  to  the  demands  of  their  traffic, 
this  company  is  too  well  managed  to  allow  their  facilities  to  get  behind 
their  traffic.  The  only  explanation  was,  that  this  region  had  filled  the 
agreement  which  the  President  of  these  companies  had  made  for  it 
without  the  authority  of  the  men  of  the  region,  and  without  asking 
them  anything  about  it.  He,  out  of  his  own  head  and  by  virtue  of  the 
power  of  these  companies,  had  made  that  agreement  for  them  and  they 
must  abide  by  it ;  and  when  they  had  filled  their  quota,  they  had  to 
stop.  The  company  tell  you  that  they  could  carry  200,000  tons  of  coal 
per  week,  that  their  facilities  were  equal  to  this.  This  is  true,  but, 
gentlemen,  I  do  not  think  you  will  find  in  their  tonnage  report  any  four 
weeks  in  the  year,  in  which  they  carried  200,000  tons.  I  looked  over 
it  carefully,  and  therefore  say  this  advisedly.  Now,  when  we  got  into 
this  inquiry,  the  despatchers  were  called  ;  and  what  do  they  say?  They 
say  they  made  no  discrimination  as  between  individual  operators.  Why, 
of  course  they  did  not.  Can  you  imagine  that  gentlemen  of  the  ability, 
of  the  thorough  knowledge  of  their  business,  that  is  possessed  by  the 
managers  of  this  road,  would  have  put  it  into  the  power  of  fifteen, 
twenty  or  twenty-five  deputy  sub-district  despatchers,  or  whatever  their 
official  title  may  be,  to  take  away  their  charter.  There  can  be  no 
offence  committed  by  a  common  carrier  higher  than  that  of  refusing 
to  carry  when  he  has  means,  and  certainly  they  would  not  have 
told  those  men  to  make  any  discrimination  between  collieries,  nor 
would  they  have  permitted  it  for  one  day  if  they  had  known  that 
any  such  discrimination  was  made;  but  the  district  despatchers  and  the 
head  despatcher  himself  could  not  distribute  any  more  cars  than  they 
had.  If  THEIR  CARS  TO  THE  NUMBER  OF  10,000  were 
strung  along  the  line  of  their  road  and  USED  AS  STORE-HOUSES 
for  the  coal  of  the  Coal  and  Iron  Company,  as  was  admitted  on  the 


77 

stand  by  Mr.  Wooten,  their  General  Superintendent,  they  would  have 
only  fifty  per  cent,  of  the  cars  of  the  region  to  distribute,  and  the 
production  would  be  stopped  just  to  that  extent.  Well,  sirs,  the  thing 
was  awkward.  The  region  was  completely  under  control ;  but,  in 
making  a  blockade,  in  putting  10,000  cars  along  the  track,  there  was  a 
great  loss  to  the  company.  Of  course  there  was ;  and  in  attempting  to 
deny  these  detentions,  they  asked  us,  "  would  it  not  be  ridiculous  for  us 
to  lose  all  this  car  service,  if  we  could  help  it?"  The  answer  is  that 
they  either  had  to  lose  the  car  service,  or  decrease  the  price  of  their 
coal ;  and  they  preferred  to  lose  the  money  on  their  tolls,  and  make  it 
up  on  the  coal.  IT  WAS  ONLY  A  QUESTION  AS  TO  WHICH 
POCKET  IT  WENT  INTO— the  right-hand  side  pocket  of  the 
Reading  Railroad  Company,  or  the  left-hand  side  pocket  of  the  Coal  and 
Iron  Company — that  was  all ;  it  was  with  them  a  mere  matter  of  book- 
keeping as  to  which  side  made  the  money, — whether  it  was  to  be 
credited  to  tolls  or  to  coal.  Rut  it  was  awkward,  it  was  expensive,  it 
it  was  onerous,  and  therefore  they  formed  THE  COAL  EXCHANGE, 
so  that  thereafter  this  business  of  curtailing  production,  instead  of  being- 
carried  out  by  the  act  of  the  Reading  Railroad  Company,  in  making- 
storehouses  of  its  cars  and  keeping  them  standing  loaded  on  its  tracks, 
and  thereby  curtailing  the  cars  and  the  shipments,  should  be  done  there- 
after by  a  committee.  That  was  all,  and  that  was  the  sole  purpose  of  the 
Coal  Exchange. 

Then,  gentlemen,  they  say,  "this  combination  is  nothing;  you  have 
it  in  every  business;  every  rope,  every  tack,  every  smoke-stack  and  so 
on  that  yuu  buy  is  controlled  by  a  combination."  Well,  now,  that 
may  be,  but  those  combinations  are  not  the  same  as  this  one;  there  is 
nothing  in  the  world  to  prevent  you  or  me,  or  either  of  us,  from  going 
into  any  of  these  businesses.  We  can  start  a  rope  factory,  if  we  please 
and  if  we  have  money  enough;  we  can  start  it  anywhere  we  please, 
and  "the  combination"  cannot  stop  it;  we  can  join  "the  combination" 
or  stay  out,  just  as  we  please ;  but  as  far  as  this  business  of  coal  is 
concerned,  these  companies  have  the  market  by  the  throat,  there  is  no 
man  that  goes  into  the  business  but  must  send  his  product  over  their 
lines ;  there  is  no  man  that  can  go  into  the  business,  but  must  be 
dependent  upon  them  as  to  whether  or  not  he  succeeds ;  and  no  man 
can  succeed  in  his  individual  capacity,  where  his  production  is  to  be 
curtailed  unless  he  joins  with  the  combination  of  the  curtailers. 

Now   THE   LAW  AGAINST   SUCH   A    COMBINATION   IS 


78 

VERY  PLAIN,  and  it  is  founded  upon  this  very  fact,  that  wherever 
any  combination  controls  the  production,  wherever  it  has  the  power  to 
keep  other  people  out,   then  the   natural   and   inevitable  result   is   to 
enhance  the  price  and  it  becomes  of  itself  illegal.     In  this  case  of  the 
Morris  Run   Coal   Company,  The   Barclay  Coal   Company  in  18  P.  F. 
Smith,  p.  173,  which  has  been  so  often  cited,  on  page  183  the  referee 
uses  some  pertinent  language.    First,  let  me  say  that  these  corporations, 
the  Morris  Run,  the  Barclay  Coal  Company  and  some  others,  controlled 
two  small  regions  of  bituminous  coal  in  the  north-western  part  of  Penn- 
sylvania, called   the  Barclay  and  Blossburg  regions— a  matter  which, 
as    compared  with  the  anthracite  coal  region  here  in  question,  was  of 
little  or  no  importance.     They  did   have  a  monopoly  of  that  region, 
just  exactly  as  these  companies  have  a  monopoly  of  the  anthracite  coal 
region;    the    difference   between   them    being  that   there    are   regions 
without  number  of  bituminous  coal,  that  it  can  be  found  almost  any- 
where in   the  United  States,  that  nobody  can  get  the  control  of  that 
product  for  any  more  than  a  certain   limited  territory,  while  this  com- 
bination, in  controlling  this  anthracite  coal  field  of  Pennsylvania,  has 
the  whole  of  the  known  product  of  the  world  in  their  hands.     Now, 
this  is  what  the  referee  says: 

"  These  corporations  represented  almost  the  entire  body  of  bituminous 
coal  in  the  northern  part  of  the  State.  By  combination  between  them- 
selves they  had  the  power  to  control  the  entire  market  in  that  district, 
and  they  did  control  it  by  a  contract  not  to  ship  and  sell  coal  otherwise 
than  as  therein  provided.  And  in  order  to  destroy  competition  they 
provided  for  an  arrangement  with  dealers  and  shippers  of  anthracite 
coal.  They  were  thereby  prohibited  from  selling  under  prices  to  be 
fixed  by  a  committee  representing  each  company.  And  they  were  ob- 
liged to  suspend  shipments  upon  notice  from  an  agent  that  their  allotted 
share  of  the  mar/ret  had  been  forwarded  or  sold." 

For  'agent"  read  "committee"  and  you  have  exactly  this  combi- 
nation. 

" Instead  of  regulating  the  business  by  the  natural  laws  of  trade,  to 
ivit,  those  of  demand  and  supply,  these  companies  entered  into  a 
league,  by  which  they  could  limit  the  supply  below  the  demand,  in 
order  to  enhance  the  price.  Or,  if  the  supply  was  greater  than  the 
demand,  they  could  nevertheless  compel  the  payment  of  the  price  arbi- 
trarily fixed  by  the  joint  committer.  The  restraint  on  the  trade  in 
bituminous  coal   teas   by   this   contract   as   wide  and  extensive   as   the 


79 

market  for  the  article.  It  already  embraced  the  State  of  New  York, 
and  loas  intended  and  no  doubt  did  affect  the  market  in  the  Western 
States." 

Now,  what  was  the  reply  to  this?  Indeed,  gentlemen,  if  I  had  not 
known  the  entire  ability  of  the  gentleman  who  appeared  for  the  defence, 
I  would  have  thought  that  he  had  borrowed  his  defence  here  from  the 
very  case  I  am  now  citing.  I  read  from  the  opinion  of  Chief  Justice 
Agnew. 

"The  plaintiff  in  error's  reply  to  this  vigorous  statement  of  the  pur- 
pose of  the  contract  and  its  effect  upon  the  public  interest,  alleges  that 
its  true  object  was  to  lessen  expenses,  to  advance  the  quality  of  the  coal, 
and  to  deliver  it  in  the  markets  it  was  to  supply,  in  the  best  order,  to 
the  consumer." 

It  was  all  to  tnke  care  of  the  consumer,  you  see  ! 

"This  is  denied  by  the  defendants;  but  it  SEEMS  TO  US  IT  IS  IMMA- 
TERIAL WHETHER  THESE  POSITIONS  ARE  SUSTAINED  OR  NOT.  Ad- 
mitting their  correctness,  it  does  not  follow  that  these  advantages  redeem 
the  contract  from  the  obnoxious  effects  so  strikingly  presented  by  the 
referee.  The  important  fact  is  that  these  companies  control  this 
immense  coal-field ;  that  it  is  the  great  source  of  supply  of  bituminous 
coal  to  the.  State  of  New  York  and  large  territories  westward ;"  and 
in  our  case  it  is  not  only  the  great  source  of  supply,  but  it  is  the  only, 
the  exclusive  source  of  supply,  not  to  New  York  alone  but  to  the 
whole  United  States,  "that  by  this  contract  they  control  the  price  of 
coal  in  this  extensive  market,  and  make  it  bring  sums  it  would  not 
command  if  left  to  the  natural  laws  of  trade;  that  it  concerns  an 
article  of  prime  necessity  for  many  uses ;    that  its  operation  is  general 

in  this  large  region,  and  affects  all  who  use  coal  as  a  fuel;    and  th>s  is 
accomplished  by  a  combination  of  all  the  companies  engaged  in  this 

branch  of  business  in  the  large  region  where  they  operate.      The  combi- 
nation  is  wide  in  scope,  general  in  its  influence,  and  injurious  in   its 

effects.      These  being  its  features,  the  contract  is  against  public  policy, 

illegal,  and  therefore  void." 

And  again  the  Chief  Justice  says  on  page  186 : 

-The  effects  produced  on  the  public  interests  lead  to  the  consideration 

of  another  feature  of  great  weight  in  determining  the  illegality  of  the 

contract,    to   wit :    the   combination   resorted  to  by  these  five  companies. 

Singly,  each  might  have  suspended  deliveries   and  sales  of  coal  to  suit 

its  own    interests,   and   might   have  raised  the  price,  even    though    this 


80 

might  have  been  detrimental  to  the  public  interest.  TJiere  is  a  certain 
freedom  ichich  must  be  allowed  to  every  one  in  tlie  management  of  his 
own  affairs.  When  competition  is  left  free,  individual  error  or  folly 
will  generally  find  a  correction  in  the  conduct  of  others.  But  here  is 
a  combination  of  all  the  companies  operating  in  the  Blossburg  and 
Barclay  Mining  regions,  and  controlling  their  entire  production.  They 
have  combined  together  to  govern  the  supply  and  the  price  of  coal  in 
all  the  markets  from  the  Hudson  to  the  Mississippi  rivers,  and  from 
Pennsylvania  to  the  lakes.  This  combination  has  a  power  in  its  con- 
federated form  which  no  individual  action  can  confer.  The  public 
INTEREST  MUST  SUCCUMB  TO  IT,  FOR  IT  HAS  LEFT  NO  COMPETITION 
FREE  TO  CORRECT  ITS  BALEFUL  INFLUENCE.  When  the  supply  of 
coal  is  suspended,  the  demand  for  it  becomes  importunate,  and  prices 
must  rise.  Or  if  the  supply  goes  forward,  the  price  fixed  by  the  con- 
fede rates  must  accompany  it.  The  domestic  hearth,  the  furnaces  of  the 
iron  master,  and  the  fires  of  the  manufacturer,  all  feel  the  restraint, 
while  many  dependent  hands  are  paralyzed  and  hungry  mouths  are 
stinted.  The  influence  of  a  lack  of  supply,  or  a  rise  in  the  price  of 
an  article  of  such  prime  necessity,  cannot  be  measured.  It  permeates 
the  entire  mass  of  the  community,  and  leaves  few  of  its  members  un- 
touched  by  its  withering  blight.  Such  a  Combination  is  more 
than  a  Contract,  it  is  an  Offence." 

Now,  gentlemen,  has  it  worked  so  in  this  case  ?  That  is  the  question. 
Why,  let  us  try  and  see  through  this  flimsy  guise  of  sympathy  for  the 
consumer  under  which  the  combination  was  formed.  The  producer 
and  consumer  brought  together — the  middleman,  the  retailer  and  every- 
body else  dispensed  with  !  How  glorious  it  will  be  :  The  producer  will 
sell  so  much  the  cheaper,  and  the  consumer  will  get  all  the  benefit. 
Now,  before  the  company  was  formed,  everybody  made  his  own  price, 
the  collieries  made  their  own  prices.  That  was  a  matter  of  very  con- 
siderable objection  to  the  road.  Here  is  a  reply  made  to  one  of  the 
gentleman  who  objected  to  going  into  the  pool.  He  said,  "I  don't 
believe  in  this  thing ;  I  think  I  cau  do  my  business  better  than  you 
can  do  it  for  me ;  I  have  a  good  coal  and  an  established  market  and  I 
can  make  my  living."  The  President  of  the  companies,  rising  and 
endeavoring  to  explain  why  it  was  that  he  used  the  expression  that 
has  been  adverted  to,  says:  "The  conversation  then  drifted  into  a 
more  general  discussion,  in  which  I  was  annoyed  to  find  that  the  old 
idea  that  every  single  operator  had  better  coal  than  his  neighbor,  had 


81 

so  possessed  the  minds  of  most  who  were  present,  that  it  seemed  to  me 
that  each  one  would  be  better  satisfied  in  getting  two  dollars  for  his 
coal,  if  his  neighbor  only  got  $1.75,  than  he  would  be  in  getting  $3 
for  his  coal,  if  his  neighbor  got  the  same."  But  the  result  of  this 
thing,  gentlemen,  is  plainly  that  he  does  get  83  for  his  coal,  and  that 
his  neighbor  gets  the  same  ;  you  have  no  longer  your  choice  between 
SI. 75  and  $2,  but  the  whole  thing  has  been  arranged  for  you,  and 
you  have  Hobson's  choice,  to  pay  $3  or  get  none. 

"Where  are  the  manufacturers,  where  are  the  operators,"  the  gentle- 
man asks,  "why  do  they  not  come  forward  and  complain?"  I  tell  you, 
gentlemen,  the  names  of  the  manufacturers  were  upon  that  petition 
for  this  investigation.  You  yourselves  saw  them.  And  as  far  as  the 
operators  are  concerned,  when  they  were  asked  why  did  they  not  com- 
plain when  they  did  not  get  cars,  they  said  plainly,  and  they  answered 
most  truly,  "THE  REASON  WE  DID  NOT  COMPLAIN  WAS, 
because  we  would  rather  stop  the  production  of  coal  than  that  prices 
should  fall."  No  wonder  they  did  not  complain;  no  wonder  they 
were  most  unwilling  witnesses.  Every  man  in  that  trade  who  was 
called  before  you  testified  that  it  was  owing  to  this  combination,  and 
to  this  combination  alone,  that  there  was  a  rise  in  the  prices  of  coal. 
Mr.  Parrish  says  he  would  have  been  in  bankruptcy  but  for  the  rise 
in  prices ;  Mr.  Thomas  says  the  prices  had  raised,  but  he  was  making 
money  in  1872.  How  much  he  is  making  now  I  do  not  know,  but  I 
do  not  wonder  that  he  likes  it.  Then  Mr.  Neill  said  a  good  deal  on 
that  subject  also.  When  talking  of  this  very  business  of  a  reduction 
of  cars  and  increase  in  prices,  he  was  asked,  :'  Now,  if  competition  was 
left  entirely  open  and  free,  is  it  not  your  opinion,  if  each  man  were  to 
mine  and  sell  his  own  coal  himself  or  through  a  factor,  would  not  the 
tendency  be  to  crowd  out  the  poorer  qualities  of  coal,  and  introduce 
to  the  public  better  qualities.  If  it  were  not  for  the  policy  at  present 
pursued  by  the  Reading  Railroad  Company  and  the  Reading  Coal  and 
Iron  Company,  in  giving  to  parties  wharves  for  such  coals  as  they 
controlled  or  mined,  is  it  not  your  opinion  that  these  poorer  qualities 
of  coal  would  have  been  entirely  crowded  out  of  the  market  and  better 
qualities  of  coal  would  be  now  furnished  to  consumers  ?  "  He  answers 
thus  :  "  I  think  if  there  was  no  restriction  in  the  production — "  Now, 
mind  you,  we  have  been  asked  here  where  was  the  restriction  in  pro- 
duction, where  was  our  testimony  that  this  production  had  been  stopped. 
Why,  sirs,  it  is  there ;  it  is  in  this  car  detention.     This  Coal  Exchange 


82 

never  stopped  production,  because  at  the  time  we  took  our  testimony 
they  had  not  gone  into  active  operation.  They  had  formed  it  in 
January,  1875,  and  in  May  and  June,  when  the  witnesses  testified, 
they  had  not  commenced  to  mine,  owing  to  the  strike  ;  it  was,  as  I 
have  said,  simply  to  organize,  to  simplify,  to  reduce  to  something  like 
a  system  these  car  detentions,  which  were  spoken  of  as  a  means  of 
stopping  production,  and  which  every  one  of  these  men  speaks  of  as 
a  means  of  stopping  production  and  keeping  up  and  raising  still  higher 
the  price  that  this  Coal  Exchange  was  formed.  But,  to  return  to 
Mr.  Neill ;  he  says:  "I  think  IF  THERE  WAS  NO  RESTRICTION 
IN  THE  PRODUCTION,  the  price  of  coal  would  run  down  so 
]ow — if  each  miner  had  as  many  cars  as  he  could  load  with  coal 
to  throw  on  the  market — the  condition  of  the  market  would  be  such 
that  the  BEST  COAL  would  not  be  worth  more  than  A  DOLLAR 
AND  A-HALP  A  TON  at  Port  Carbon,  while  the  POORER 
COLLIERIES  would  have  been  SOLD  OUT  BY  THE  SHERIFF, 
or  bought  by  somebody  at  about  ten  per  cent,  of  their  value." 
Now,  that  shows  whether  or  not  there  had  been  any  restriction  in 
production,  and  whether  the  prices  had  gone  up.  If  the  prices  in 
1872  had  ruled  in  1873-4,  the  coal  trade,  like  other  trades,  would 
have  had  to  lessen  their  profits,  decrease  their  expenses  and  lower  their 
prices,  and  the  price  would  have  gone,  as  Mr.  Neill  tells  you,  to  $1.50 
a  ton. 

Again,  gentlemen,  these  differences  in  prices  have  all  been  leveled  up. 
You  have  been  told  there  were  differences  as  high  as  75  cents  a  ton 
between  coals  of  different  collieries.  They  say  now — one  of  these  ope- 
rators, Mr.  Thomas,  says — "  Now  the  purchaser  must  take  the  coal  he  can 
o-et "  You  can  understand  how  that  is.  There  is  only  a  certain 
quantity  mined  so  as  to  make  sure  that  more  will  not  be  mined  than  is 
wanted.  Therefore,  the  last  man  that  comes  is  the  last  man  served, 
and  he  is  compelled  to  take  that  last  unsold  ton,  whether  it  comes  from 
Wyoming  or  Schuylkill,  whether  it  comes  from  Wilkesbarre  or  Pottsville. 
It  is  all  put  together;  and  he  has  to  take  that  ton  of  coal,  whether  it 
is  what  he  wants  or  not,  and  he  has  to  pay  the  same  price  for  it  that 
he  would  have  paid  if  it  had  been  from  the  very  colliery  he  desired. 
The  difference  in  the  company's  prices,  leaving  out  the  three  special 
coals,  which  would  always  vary  necessarily — 1  refer  to  the  Franklin 
and  Lykens  Valley  coal  and  the  Lorberry  coal,  each  of  which  has  a 
special  use  of  its  own — the  difference  between  those  coals  in  March, 


83 

1873,  (and  hardly  two  were  alike,)  was  from  $4.30  to  $4.70,  a 
difference  of  forty  cents  a  ton.  But,  in  November,  1874,  they  were 
all  alike  at  $5.90  a  ton,  except  one  coal  which  was  $5.95  a  ton.  They 
had  therefore  decreased  this  difference  between  the  collieries,  and  had 
leveled  the  prices  up  to  within  five  cents,  and  had  made  a  maximum 
increase  at  that  time  of  $1.65  a  ton. 

Now,  the  cost  to  the  country  of  this  combination  is  a  very  hard 
thing  to  estimate.  You  cannot  take  it  from  the  retailers'  prices, 
because,  as  I  have  told  you,  they  are  as  various  as  the  retailers  them- 
selves; you  cannot  take  it  from  the  company's  prices,  because  the 
company  never  was  in  business  until  the  time  that  they  formed  this 
combination.  Why,  gentlemen,  they  had  no  sooner  become  miners, 
than  they  found  out  all  about  this  great  trouble  and  expense  of 
mining.  Before  that,  the  enormous  capital  that  was  required  to 
develop  the  region,  the  great  expense  to  be  encountered,  the  dang?r  to 
life  and  property  from  the  shot  of  the  assassin,  or  the  spark  of  the 
locomotive — none  of  these  things  had  had  any  terrors  for  them,  and  had 
never  interested  them.  Ihe  dangers  of  bankruptcy  and  ruin,  the  fact 
that  gentlemen  died  without  leaving  wills  and  that  the  sheriff  settled 
people's  estates  in  Schuylkill  County,  never  startled  them  a  bit.  They 
had  their  tonnage,  and  that  was  all  that  they  wanted.  But,  when 
they  went  into  the  business,  they  were  determined  to  make  it  pay. 
We  have  no  data  from  them,  prior  to  the  beginning  of  1873,  and 
therefore  cannot  tell  how  far  they  have  raised  the  price  of  their  own 
coals,  though  they  have  raised  the  prices  very  considerably.  But,  the 
prices  at  the  Scranton  auction  sales  are  a  complete  index  to  the  prices 
of  coal  at  other  points,  and  for  other  coals,  and  to  the  effect  of  this 
combination.  Ordinarily  the  price  of  any  product  is  about  the  same 
at  all  points,  that  is  to  say,  the  cost  of  transportation  from  the  place 
where  it  is  raised  or  mined,  or  manufactured,  to  the  place  where  it  is 
sold,  is  added  to  the  cost  of  raising  or  mining,  or  manufacturing  the 
product ;  that  is  regulated  by  the  ordinary  laws  of  trade,  and  competi- 
tion keeps  the  prices  as  nearly  uniform  as  the  distance  which  the 
article  is  carried  will  permit.  But,  this  is  peculiarly  and  especially  so 
with  coal,  because,  as  the  gentleman  who  appears  here  for  the  Reading 
Companies  has  himself  told  you,  the  effect  of  this  combination  was  to 
make  the  price  uniform  at  the  mines,  and  gradually  increasing  accord- 
ing to  the  distance  which  it  was  carried  from  the '  mines  to  the 
consumer  or  purchaser.     That  is  to  say,  the  nearer  the  mines  you  buy 


84 

coal,  the  lower  the  price,  and  the  further  from  the  mines  you  buy,  the 
higher  the  price,  because,  to  the  price  at  the  mines  is  added  the  cost  of 
transportation.  Therefore,  these  Scranton  sales,  by  the  ordinary  laws 
of  trade,  and  especially  by  the  rules  introduced  by  this  combination, 
are  an  accurate  test  of  the  additions  to  the  price  of  coal  which  have 
been  made  by  this  combination. 

In  looking  over  this  list  of  Scranton  prices,  (pp.  603  to  GOT,  of  this 
testimony),  I  took  the  trouble  to  make  the  averages  of  those  prices  for 
1872,  73,  and  74.  In  1872,  they  averaged  $3.70  per  ton;  in  1873, 
they  averaged  $4.90  per  ton.  That  was  an  advance  of  $1.20  a  ton. 
And  in  1874,  in  the  face  of  the  depression  in  every  other  business,  and 
when  everything  else  had  decreased  in  price  and  in  value,  they  further 
increased  the  price  to  $5.13,  or  a  further  advance  of  23  ceuts  per  ton. 
In  other  words,  in  the  course  of  two  years  working  of  this  beautiful 
machine,  THEY  HAD  RAISED  THE  PRICE  $1.43  A  TON. 
Now,  to  do  that,  they  had  to  further  reduce  production  in  1874.  In  1  (-74. 
they  made  their  production  1,300,000  tons  lessthan  it  was  in  1873, because 
they  could  not  force  the  coal  on  the  people  at  the  price  they  had  raised 
it  to.  The  public  would  go  cold  and  hungry,  because  they  could  not 
pay  the  price  and,  therefore,  strong  as  was  this  combination,  they  were 
compelled,  in  order  to  make  that  further  advance  of  twenty-three  cents 
a  ton  in  1874,  to  shorten  their  production  to  market  1,300,000  tons. 

They  produced,  in  1873,  22,823,000  tons  and,  in  1874,  21,510,000 
tons.  This  combination  cost  the  people  of  this  country,  in  1873,  at  an 
average  advance  of  $1.20  a  ton,  $27,387,000.  No  wonder  these 
gentlemen  like  their  combination  and  cling  to  and  attempt  to  defend  it ! 
And  in  1874,  with  1,300,000  tons  of  coal  less  to  sell,  they  got 
$3,000,000  more  money  for  it,  and  made  $30,768,000  out  of  the  people 
of  this  country.  Why,  sirs,  talk  about  weights — talk  about  the  alleged 
shortage  of  some  of  these  retail  dealers — what  is  their  alleged  short- 
weight  in  comparison  with  this?  No  wonder  these  gentlemen  stick 
together  as  a  band  of  brothers !  No  wonder  these  operators  cannot  be 
induced  to  testify  to  anything  that  they  do  not  personally  see,  and  then 
only  when  they  have  been  asked  about  it  over  and  over  again  in  a 
dozen  different  forms. 

They  talk  about  the  bulk  of  coal  to  be  handled,  the  risk  to  capital  in 
the  business ;  they  talk  about  everything  else  directly  and  indirectly  or 
not  connected  at  all  with  the  coal  business;  but,  they  do  not  say  one 
word  about  the  FIFTY-SEVEN  MILLIONS  OF  DOLLARS  THAT 


85 

THEY  HAVE  MADE  by  this  combination,  and  by  this  combination 
alone,  IN  THE  LAST  TWO  YEARS.  That  amount  is  based  upon 
the  prices  lor  1872.  How  much  more  it  would  have  been  in  the  face 
of  the  depression  of  every  other  business,  how  much  the  prices  for 
L8Y3  and  1874,  would  have  fallen  below  that  of  1872,  in  sympathy 
with  the  general  decline  in  the  prices  and  value  of  all  other  property, 
and  in  the  face  of  the  fact  that  1872  was  by  no  means  the  lowest  year 
that  the  coal  trade  had  gone  through  and  had  existed  and  had 
succeeded,  1  cannot  tell  you;  and  no  one  can  now  know;  the  real 
advance  caused  by  this  combination,  in  all  probability  is,  at  least,  double 
the  amount  I  have  stated,  $57,000,0011. 

No  wonder  that  this  Beading  Railroad  Company  fight  a  legislative  or 
any  other  investigation  in  every  way  they  can  devise.  This  Reading 
Railroad  Company  made  in  1873,  simply  out  of  this  rise  produced  by 
this  combination,  $7,000,000,  and  in  187-4,  with  less  coal,  they  made 
$7,500,01)0;  and  this  profit  is  certainly  considerable  enough  to  justify 
their  keeping  their  cars  standing  loaded  on  the  tracks,  so  as  to  reduce 
the  production  and  bring  in  this  profit. 

Why,  sirs,  it  is  not  to  be  wondered  at  that  the  learned  counsel  for 
the  defence  when  he  comes  to  argue  this  case,  travels  out  of  the  record 
and  speaks  of  everything  else  but  the  matter  before  you. 

He  has  told  you  about  his  fifteen  years  experience  in  the  coal  region, 
and  then  traveled  off  into  a  discussion  of  the  labor  question,  but,  that 
question,  as  you  will  recollect,  was  expressly  excluded  from  this  case, 
and  you  decided,  properly  no  doubt,  that  it  was  not  within  the  scope  of 
your  authority  to  investigate.  Whenever  the  word  "labor"  was  men- 
tioned by  any  of  the  witnesses,  we  were  promptly  met  by  the  objection 
of  the  learned  counsel,  and  the  testimony  was  under  your  ruling  re- 
jected, and,  as  this  question  is  not  before  you  and  no  testimony  has  been 
given  upon  it,  I  will  not  further  refer  to  it. 

He  has  spoken  upon  the  condition  of  the  trade,  the  character  of  the 
coal  regions,  the  difficulties  of  mining  and  handling  coal,  the  great  bulk 
of  coal  and  the  impossibility  of  storing  it,  the  large  capital  required,  the 
risk  that  capital  is  at,  the  character  of  this  Railroad  Company  and  it's 
employees,  the  discipline  that  is  enforced  among  them,  the  manner  in 
which  they  are  treated  by  the  company,  and  in  short  upon  every  subject 
under  the  sun,  except  the  points  at  issue  before  you,  and  except  the 
advance  in  the  prices  of  coal. 


86 

That  is  the  secret  of  this  whole  combination. 

Speaking  of  this  combination,  he  asks,  "  Why  do  you  attack  us,  why 
don't  you  go  for  some  other  of  these  companies  instead  of  these 
Reading  Companies? 

We  answer  that  we  attack  these  Reading  Companies  because,  until 
they  became  themselves  purchasers  of  coal  lands,  and  miners  and  sellers 
of  coal,  until  these  Reading  Companies  came  into  this  trade,  and  formed 
and  organized  this  combination,  it  was  an  absolute  physical  impossibility, 
it  never  had  been  created,  it  could  not  be  created.  The  coal  trade  had 
commenced  in  1820,  and  had  gone  to  1872  without  it.  For  fifty-two 
years,  this  trade,  dreadful  as  it  is,  dangerous  as  it  is,  with  all  its  evils, 
had  lived  and  succeeded.  It  had  grown  rich  and  had  peopled  the 
valley  of  the  Schuylkill,  the  valley  of  the  Lehigh,  the  valley  of 
Wyoming.  Why,  gentlemen,  the  Railroad  Company  had  done 
none  of  this.  It  was  all  there  and  the  Railroad  Company  came 
in,  not  like  a  falcon,  but  like  a  cormorant,  to  take  that  which  other 
people  had  built.  They  had  there  everything  to  their  hand.  This 
Philadelphia  and  Reading  Railroad  Company  took  hold  of  this  thing 
with  an  iron  hand  and,  by  the  mere  force  of  their  power,  in  the  years 
1873  and  '74,  brought  about  this  arrangement,  made  this  combination 
and  caused  this  advance  in  the  prices.  This  combination  was  suggested, 
not  by  any  one  who  had  been  connected  with  these  coal  companies,  for 
the  long  years  the  coal  trade  had  been  in  existence,  but,  by  the  repre- 
sentative of  the  Reading  Companies  as  soon  as  they  went  into  the  business, 
and  the  first  thing  that  these  companies  did  when  they  went  into  the 
business  was  to  form  the  combination.  No  wonder,  therefore,  they  talk 
about  everything  else  but  that!  That  is  the  reason  why  they  have 
been  attacked;  because,  it  is  to  them,  and  to  them  alone,  that  the 
existing  state  of  affairs  is  due.  It  was  of  their  creation,  their  bringing 
about,  and  but  for  them  it  could  not  have  existed,  and  would  not  exist 
to-day.  The  gentleman  talks  about  the  exactions  of  the  middlemen, 
about  the  exactions  of  the  retailer,  about  the  difference  that  twenty-five 
cents  a  ton  makes,  and  says  that  it  makes  the  difference  between 
beggary  and  success.  He  asks  whether  we  want  to  beggar  the  region  ; 
and  asked  my  colleague  in  his  opening,  whether  that  gentleman  thought 
it  would  be  a  good  thing  to  have  Schuylkill  County  bankrupt.  We  do 
not  ask  that;  certainly  not;  and  yet,  neither  do  we  want  the  Schuylkill 
County  coal  companies  to  absorb  $57,000,000  of  the  people's  money 
more  than  is  a  fair  remuneration  for  their  production  of  coal. 


87 

Again,  here  is  a  company  that  owns  almost  all,  certainly  the  larger 
part  of  the  Schuylkill  coal  region ;  and  if,  as  alleged,  that  region  was 
capable  of  so  much  over-production,  if  it  was  so  difficult  for  them  to 
find  a  market  for  their  product,  if  they  were  so  unable  to  get  the  coal 
out  and  put  it  in  the  hands  of  the  consumer  at  a  fair  living  profit,  why 
then  did  these  companies  start  their  improvement,  the  only  one  they 
have  started  so  far  as  I  know,  the  great  East  Norwegian  shaft?  I 
say,  and  I  have  a  right  to  argue  that  it  was  for  this  reason,  that 
hereafter,  as  their  collieries  go  on,  they  will,  under  the  two  colliery 
rule  that  I  have  mentioned,  take  a  larger  and  larger  proportion 
of  the  cars,  they  will  have  more  and  more  of  the  production, 
until  finally  the  individual  operators'  production  will  come  down  to 
almost  one  car  in  every  hundred  of  his  capacity.  What  then  will 
become  of  him?  And,  I  ask  you,  gentlemen,  who  represent  the  county 
of  Philadelphia,  WHAT  IS  TO  BECOME  OF  YOUR  VALUABLE 
GIRARD  LANDS,  when  that  state  of  things  is  brought  about?  I  say 
that  this  alleged  over-production  is  no  explanation,  and  that  there  has 
been  no  explanation  of  this  combination,  that  there  is  nowhere  given  a 
full  and  complete  answer  to  the  objections  to  it,  that  there  has  not  been 
at  any  time  stated  to  you  any  reason  for  making  this  combination,  other 
than  such  as  existed  at  the  time  that  these  gentlemen,  with  their  eyes 
open  and  a  full  knowledge  of  the  subject,  concluded  to  go  into  the 
business  of  mining  and  selling  coal,  and  did  go  into  that  business. 
And  I  say  to  you  that,  •  whether  any  reason  for  it  existed  or  not,  there  is 
no  fair  justification  or  excuse  for  these  six  corporations,  whether  owned 
in  New  York  or  in  England,  to  FLEECE  THE  PEOPLE  of  this 
country  to  the  extent  OF  THIRTY  MILLIONS  OF  DOLLARS 
A  YEAR, 

Now,  where  is  all  this  going  to  end  ?  This  company  started  by 
saying  they  were  going  to  give  us  coal  at  moderate  prices,  that  the 
benefit  was  all  for  the  consumer,  and  that  they  were  going  to  bring 
the  producer  and  consumer  together.  I  have  shown  you  something 
about  what  "  moderate  prices"  are.  If  in  1872  they  could  sell  their 
coal  at  S3. 70  and  make  money — and  some  of  them  did  make  money, 
there  is  no  doubt  about  that,  they  testified  to  it,  they  admitted  that 
they  did ;  if  that  was  a  fair  price  and  no  more  than  a  fair  price,  taking 
it  as  a  minimum  basis,  why  did  they  not  keep  to  it  or,  if  they  wanted 
to  run  it  up  a  little,  in  order  to  cover  some  poor  man,  who  they  thought 
was  entitled  to  make  more  than  his  ordinary  share  of  money  out  of 


8S 

the  community,  why  did  they  not  stop  when  they  had  run  it  up  to 
25  cents  a  ton  higher,  the  figure  about  which  they  have  talked  so 
much  ?  They  claimed  that  they  went  into  the  commission  business,  or 
this  "pool"  arrangement,  to  keep  down  the  prices,  and  that  they 
could  and  would  do  this  business  for  ten  cents  a  ton ;  but  I  have 
shown  you  that  in  this  business,  which  they  got  control  of  by  doing 
it  so  cheap  that  they  at  first  lost  30  cents  a  ton,  they  now  make  50 
cents  a  ton,  or  double  the  profit  that  was  ever  made  before,  and  double 
that  which  they  themselves  assert  to  have  been  exorbitant  and 
extortionate,  when  made  by  the  factors  or  middlemen. 

They  say  they  want  a  moderate  profit  and  while  in  that  connection 
and  in  the  same  breath,  they  assert  that  an  advance  on  the  prices  of 
1872  was  necessary,  that  25  or  30  cents  per  ton  more  was  required  to 
save  the  coal  region  from  bankruptcy  and  ruin,  and  they  ask  you 
whether  it  is  not  better  that  that  small  advance  should  be  made,  than 
that  such  a  calamity  as  the  bankruptcy  of  a  large  region  should  happen. 

I  have  shown  you  from  the  testimony  and  even  by  their  own  ad- 
missions made  at  the  time,  that  the  prices  of  1872  were  remunerative 
and  the  coal  trade  prosperous;  but  admitting  it  was  not,  what  justifi- 
cation is  there  for  this  further  amount  they  have  raised  the  prices  of  coal. 
If  an  advance  of  25  or  30  cents  would  save  the  region,  would  make 
all  the  difference  between  beggary  and  success,  as  the  gentleman  has 
said,  why  raise  the  price  more  than  a  dollar  over  a  fair  profit,  why 
raise  the  price  $1.43  per  ton,  when  30  cents  at  the  utmost,  according 
to  their  own  account,  was  all  that  was  required. 

I  have  shown  you  that  they  have  put  it  up  to  $1.43  per  ton  higher, 
aud  I  ask  WHERE  ARE  THEY  GOING  TO  STOP? 

Formerly  there  was  a  system  of  commissions  and  drawbacks  on  con- 
tracts, and  a  great  many  ways  by  which  an  operator  could  sell  coal  to 
the  manufacturer  or  individual  for  something  less  than  the  market 
prices.  If  you  look  at  their  agreements,  at  this  agreement  of  the 
Coal  Exchange  and  the  programme,  as  it  is  called,  of  the  New  York 
Companies,  you  will  see  that  every  one  of  those  ways  is  now  closed, 
that  there  is  now  absolutely  no  way  by  which  any  man  can  buy  a 
pound  of  coal,  except  at  the  regular  circular  or  monthly  prices;  and 
even  when  he  buys  it  by  the  year  he  must  buy  it  at  a  certain  average, 
formed  by  taking  the  average  of  their  regular  monthly  advances  in 
the  prices,  and  these  monthly  advances  are  all  as  regular  as  clock  work, 
as  regularly  as  the  month  comes  round  the  price  advances.     You  must 


89 

have  coal  and  these  companies  tell  you  they  have  it  all,  and  fix  the 
price  you  must  pay  for  it ;  and  that  amount  you  must  pay  or  else  you 
go  without.  THEY  CAN  EXTORT  WHAT  THEY  PLEASE;  they 
can  make  the  price  to  suit  themselves.  It  does  seem  to  me,  gentlemen, 
upon  the  face  of  this  testimony  and  exhibits,  and  upon  what  you  your- 
selves know  as  experienced  business  men,  of  the  necessary  and  universal 
effect  of  a  monopoly  of  this  kind ;  that  it  is  the  duty  of  the  legis- 
lature to  do  something  to  stop  this  great  and  crying  evil,  and  that  it  is 
your  duty  so  to  report  to  them.  You  have  been  appointed  to  investi- 
gate— what  ?  Whether  or  not  these  Philadelphia  and  Reading  Companies 
had  any  chartered  right  to  do  what  they  do,  that  is  to  say,  to  engage 
in  the  mining  and  selling  of  coal.  That  is  certainly  a  matter  of  very 
grave  doubt.  It  is,  however,  a  question  of  law  and  for  the  Courts  to 
determine,  but  it  is  your  duty  to  direct  that  it  shall  be  brought 
before  the  Courts,  and  to  direct  your  law  officer,  the  Attorney  General 
of  the  Commonwealth,  to  obtain  a  writ  of  quo  warranto  and  inquire 
by  what  authority  this  company  claims  the  franchises  it  has  usurped. 

You  have  been  appointed  to  inquire  as  to  ansther  matter,  a  matter 
of  fact.  What  ?  Whether  these  Philadelphia  and  Reading  Companies 
have  combined  with  others  to  coutrol  the  prices  and  production  of 
coal.  This  you  must  answer  affirmatively.  They  stand  before  you 
and  admit  it.  It  is  shown  in  every  line  of  the  testimony  and  of  the 
exhibits.  It  is  not  denied.  You  must  so  report  to  the  legislature ; 
and  gentlemen,  you  must  report  too,  that  A  MONOPOLY  SUCH 
AS  THIS  IS  INJURIOUS  TO  THE  PUBLIC,  in  that  "IT 
BRINGS  THE  GENERAL  PROFIT  INTO  A  PRIVATE 
HAND,"  aud  that  "THE  END  OF  IT  IS  BEGGARY  AND 
BONDAGE." 


Programme  op  the  Combination  of  the  Six  Coal  Producing 
Companies  for  the  Years  1873  and  1874. 


Per  cent. 

Tons. 

25.85 

2,585,000 

15.98 

1,588,000 

16.15 

1,615,000 

18.37 

1,837,000 

13.80 

1,380,000 

9.85 

985,000 

The  Committee,  F.  B.  Gowen  and  Thomas  Dickson,  report  the  follow- 
ing plan  for  the  government  of  the  trade  to  competitive  points  : 

1.  Tonnage  to  competitive  points  for  ten  months,  from  February  1 
to  November  30,  1874,  inclusive,  to  be  ten  millions  tons,  and  to  be 
distributed  among  the  six  interests  in  the  same  proportion  as  that 
adopted  in  February,  1873,  for  the  business  of  last  year,  viz : 

To  the 
Philadelphia  and  Reading  R.  R.  Co., 
Lehigh  Valley  R.  R.  Co., 
N.  J.  Central  R.  R.  Co.  int., 
Delaware  and  Hudson  Canal  Co., 
Delaware,  Lackaw'na  and  W.  R.  R.  Co. 
Pennsylvania  Coal  Co.,     . 

Total,  ....  .  10,000,000 

2.  That  a  Standing  Committee  of  six,  composed  of  one  repre- 
sentative of  each  interest,  be  appointed  for  the  season,  to  meet 
monthly,  or  oftener,  at  the  call  of  the  chairman,  to  determine  prices 
and  all  questions  relative  to  tonnage  to  competitive  points,  and  to  have 
power,  from  time  to  time,  to  permit  an  increase  or  require  a  curtail- 
ment of  shipments  to  competitive  points,  with  a  view  of  regulating  the 
relative  demand  and  supply;  provided,  that  any  increase  or  diminution 
of  shipments  be  based  upon  the  percentage  of  allotment  above  men- 
tioned, so  that  each  interest  shall  be  entitled  to  its  proper  proportion 
of  the  aggregate  competitive  tonnage,  whatever  the  same  may  be.  It 
is  recommended  that  prices  shall  open  in  March,  1875,  at  an  average 
of  fifteen  cents  per  ton  above  the  opening  price  of  1873,  and  there- 
after advance  as  follows :  say,  in  April,  five  cents ;  May,  ten  cents  ; 
June,  ten  cents ;  and  July,  August,  September,  October  and  Novem- 
ber, each  fifteen  cents ;  and  that  season  prices  be  established  so  as  not 
to  be  more  than  thirty  cents  below  the  average  of  the  year.  The 
prices  to  be  established  so  as  to  admit  the  white  ash  coals  of  the 
Reading  Railroad  Company,  Lackawanna,  Scranton,  Wilkesbarre  and 
Pittston  coals  upon  equal  terms  to  customers  in  New  York  harbor.     It 


91 

being  understood  that  any  interest  may  demand  for  any  or  all  of  its 
coal  a  higher  price  than  that  agreed  upon  by  the  Committee. 

3.  In  establishing  prices  it  is  understood  that  they  be  fixed  at  the 
respective  shipping  ports  of  Port  Richmond,  Elizabeth.  Port  Johnston, 
South  Amboy,  Hoboken,  Weehawken,  Newburgh  and  Rondout,  and 
that  no  freights,  deliveries  or  demurrages  be  guaranteed  by  any  party, 
except  with  the  previous  approval  of  the  Committee  of  Six. 

4.  No  commission  whatever  to  be  allowed  upon  coal  sold  at  yearly 
prices,  and  no  contracts  at  yearly  prices  to  be  made  with  any  one  but 
consumers  and  retailers,  and  then  only  upon  the  condition  that  all 
cargoes  of  coal  so  sold  shall  be  received  by  the  purchaser  and  taken 
upon  the  wharf,  and  not  sold  or  transferred  afloat.  No  sizes  to  be 
sold  at  yearly  or  season  prices  except  lump,  steamboat,  broken,  egg 
and  chestnut,  and  egg  only  to  consumers.  No  commissions  exceeding 
fifteen  cents  per  ton  to  be  allowed  to  any  party  buying  at  monthly 
circular  prices,  and  then  only  to  such  as  purchase  at  least  25,000  tons 
of  coal  per  annum. 

5.  All  coals  sold  at  yearly  or  season  prices  to  be  sold  by  written 
contracts,  deliverable  in  equal  monthly  proportions,  beginning  either 
on  the  1st  of  March  or  1st  of  April,  and  ending  any  time  after  the 
1st  of  November,  and  any  failure  to  take  all  or  any  of  one  month's 
proportion  to  work  a  forfeiture  pro  tanto  of  each  succeeding  month's 
proportion. 

6.  All  deliveries  of  coal  upon  monthly  allotments,  at  monthly 
circular  prices,  to  be  charged  at  the  circular  price  current  in  the  month 
in  which  the  delivery  is  made,  and  under  no  circumstance  whatever 
shall  coal,  delivered  in  one  month,  be  charged  at  the  circular  price  of 
any  preceding  month,  unless  the  purchaser  had  a  vessel  at  the  shipping 
port  ready  to  receive  such  coal  before  the  expiration  of  the  month  in 
which  the  delivery  was  to  be  made. 

7.  The  terms  of  contract  for  the  sale  of  coal  at  season  prices  and 
by  monthly  allotments  at  circular  prices  to  be  approved  by  the  Com- 
mittee of  Six. 

8.  No  allowance  to  be  made  for  impurity  of  coal,  imperfection  in 
preparation,  short  weight,  or  any  other  reason,  without  the  approval  of 
the  Committee  of  Six,  to  whom  all  such  claims  are  to  be  reported. 

9.  The  Committee  of  Six  to  have  power  to  call  for  monthly  or 
other  reports  for  each  interest  upon  any  subject  over  which  tney  have 
control,  and  to  have  authority,  if  they  desire,  to  examine  the  sales  and 
tonnage  books  and  accounts  of  any  company  or  corporation. 


Constitution,  By-Laws  and  Agreement  with  the 
Combined  Anthracite  Coal  Mining  and  Carrying 
Companies  of  the  Schuylkill  Coal  Exchange,  as 
offered  in  Evidence  before  the  Legislative  Com- 
mittee appointed  to  Enquire  into  certain  Acts 
of  the  P.  &  R.  R.  R.,  and  P.  &  R.  C.  &  I.  Co's.  by 
Joint  Resolution  of  the  Legislature  of  Pennsyl- 
vania of  1875. 

Article  1.  This  Association  shall  be  called  and  known  as  the  Schuylkill 
Coal  Exchange,  and  its  object  shall  be  to  preserve  uniformity  in  the  price  of 
Coal  and  to  transact  all  business  bearing  on  the  trade  generally. 

Second.  This  Association  shall  be  composed  of  the  individuals,  firms  and 
corporations,  who  are  engaged  in  mining  Coal  in  the  Schuylkill  region,  and 
who  shall  have  signed  the  Constitution  and  By-Laws. 

Third  The  officers  of  the  Association  shall  be  a  President,  Vice  President 
and  Secretary,  who  shall  also  act  as  Treasurer. 

Fourth.  The  said  officers  shall  be  elected  by  ballot  on  the  last  Thursday 
of  each  year,  together  with  a  committee  of  nine,  which  committee  shall  meet 
monthly  to  establish  a  minimum  price  for  each  and  every  size  of  Coal  for  the 
month  following  for  the  line  and  city  trade,  and  shall  also  have  full  power 
and  authority  to  curtail  the  shipments  or  stop  the  production  if  necessary — 
providing  that  all  curtailments  or  stoppages  shall  bear  equally  on  all  collie- 
ries— or  transact  any  other  busiuess  which  may  be  for  the  general  interest  of 
the  operators.  Said  officers  and  committee  shall  serve  for  the  ensuing  year 
or  until  others  are  chosen. 

Fifth.  In  case  of  a  vacancy  occurring  in  the  office  of  President,  Vice  Presi- 
dent or  Treasurer,  such  vacancy  shall  be  filled  by  the  Association  at  a  special 
meeting,  and  in  case  of  a  vacancy  in  the  committee,  the  remaining  members 
of  the  committee  shall  have  power  to  fill  the  vacancy. 

BY-LAWS. 

Article  1.  The  annual  meeting  of  the  Association  shall  be  held  on  the 
last  Thursday  in  December  in  each  year,  at  10  o'clock  A.  M.,  at  such  place  as 
hereafter  agreed  upon,  due  notice  of  which  shall  be  given  by  the  Secretary 
to  each  member. 

Second.  The  committee  on  line  and  city  prices  meet  monthly  at  the  office 
of  the  Philadelphia  and  Reading  Coal  and  Iron  Company,  at  12  o'clock,  m. 

Third.  Special  meetings  may  be  called  by  the  committee  at  the  request  of 
two  or  more  members,  by  giving  three  days  notice  thereof  to  all  members,  in 
which  the  object  of  the  meeting  must  be  stated. 

Fourth.  Every  individual,  firm  or  corporation,  who  is  a  member,  shall  be 
entitled  to  cast  one  vote  for  every  50,000  tons  and  fraction  thereof  shipped  by 
him  or  them  in  the  previous  year,  provided  that  every  individual,  firm  or 
corporation  carrying  on  a  colliery  and  being  a  member  of  this  Association 
shall  have  at  least  one  vote,  and  a  majority  shall  decide  any  question. 

Fifth.  No  person  who  is  not  a  member^  or  who  does  not  represent  a  mem- 
ber, or  who  is  not  invited  by  a  vote  of  the  Association,  shall  be  present,  and 
take  part  in  any  meeting. 


93 

Sixth.  The  Secretary  after  each  meeting  shall  give  notice  to  each  colliery 
which  is  not  represented  of  the  resolutions  adopted  by  the  Association  at 
that  meeting. 

Seventh.  The  ordinary  expenses  of  the  Association  shall  be  defrayed  by 
levies  made  from  time  to  time  by  the  committee,  who  shall  render  an  account 
once  a  year  or  whenever  desired  by  the  Association,  of  its  receipts  and  ex- 
penditures. 

Eighth.  Any  amendment  to  these  By-Laws  must  be  proposed  at  one  stated 
meeting  and  acted  upon  at  the  next.  A  majority  shall  adopt  the  same,  except 
upon  a  call  for  immediate  action,  at  which  time  two-thirds  of  the  votes  of  the 
members  present  shall  be  required  to  adopt  the  same. 

Ninth.  The  President  or,  in  his  absence,  the  Vice  President,  shall  call  the 
meeting  to  order.  The  Secretary  shall  call  the  roll  of  members,  and  read 
the  minutes  of  last  meeting  for  amendment  or  adoption,  when  reports  of  com- 
mittees will  be  heard,  uufinished  business  introduced,  and  a  general  inter- 
change of  views  and  opinions  on  questions  of  interest  to  the  Association. 

Tenth.  We  do  hereby  agree  that  the  action  of  the  combined  companies 
shall  govern  all  coal  for  competitive  points  that  goes  to  Port  Richmond  for 
shipment,  and  all  that  is  shipped  by  way  of  the  Schuylkill  canal,  and  con- 
signed to  points  upon  or  through  the  line  of  the  Delaware  and  Raritan  canal 
for  the  shipping  season  of  1875,  and  we  do  hereby  agree  to  abide  by  such 
action,  and  do  empower  the  President  or  Vice  President  of  the  Philadelphia 
and  Reading  Coal  and  Iron  Company  to  represent  us  in  the  premises,  and 
pledge  ourselves  to  do  all  things  necessary  to  carry  out  the  same. 

Eleventh.  For  the  government  of  the  line  and  city  trade,  we  do  hereby 
adopt  and  agree  to  observe,  and  faithfully  bind  ourselves  by  the  following 
rules,  conditions  and  restrictions  in  the  sale  of  coal  in  the  line  and  city 
trade. 

Article  1.  A  minimum  price  shall  be  established  as  above  stated  for  each 
and  every  size  of  coal  to  be  fixed  at  Port  Carbon,  and  to  be  in  force  for  the 
month  following  for  the  line  and  city  trade,  which  will  include  all  points  in 
the  vicinity  of  Philadelphia,  reached  by  cars  and  canal,  and  no  coal  shall  be 
sold  below  the  price  fixed.  The  line  trade  is  to  include  all  points  reached 
directly  by  the  Philadelphia  and  Reading  Railroad,  and  all  branches  under 
its  control,  the  canal,  the  Wilmington  and  Reading  Railroad,  Reading  and 
Columbia  Railroad,  Lebanon  Valley  Railroad,  and  Schuylkill  and  Susque- 
hanna Railroad,  including  Harrisburg,  Lancaster  and  Columbia,  unless  any 
of  said  points  be  exempted  by  order  of  the  committee. 

Second.  All  coal  shall  be  sold  at  the  shipping  point  on  the  Philadelphia 
and  Reading  Railroad  and  canal,  and  no  contract  shall  be  made  for  future 
delivery  except  at  the  monthly  prices. 

Third.  Whenever  coal  is  shipped  according  to  orders,  and  is  refused  by 
the  consignee,  no  coal  is  to  be  sold  to  the  party  so  refusing  until  he  or  they 
shall  have  paid  to  the  consignor  all  losses  or  expenses  arising  from  the  trans- 
fer and  resale  of  such  coal.  The  facts  thereof  shall  at  once  be  reported  by 
the  consignor  to  the  president  of  the  committee  on  prices,  who  shall  have 
power  to  appoint,  if  necessary,  an  inspector,  whose  report  shall  be  laid  by 
the  president  before  the  committee  for  its  further  action  thereon. 

Fourth.  All  bills  for  coal  are  payable  on  or  before  the  tenth  day  of  the 
month  following  that  in  which  the  coal  is  shipped,  but  no  penalty  shall  be 
attached  for  non-payment  until  after  the  20th.  Interest  shall  be  added  on 
all  coal  sold  on  time  from  the  first  day  of  the  month  following  that  in  which 
the  coal  is  delivered  at  the  shipping  point  for  shipment  by  railroad  and  from 
date  of  bill  of  lading  for  shipment  by  canal. 

Fifth.  Prices  at  Schuylkill  Haven  by  railroad  and  canal  shall  be  eight  (8) 
cents  per  ton  more  than  from  Port  Carbon,  and  by  canal  at  Port  Clinton 
twenty  (20)  cents  per  ton  more  than  from  Poat  Carbon. 


94 

Sixth.  While  we  bind  ourselves  in  honor  to  honestly  and  faithfully  carry 
out  the  above  resolutions,  we  further  agree  to  allow  no  commission,  abate- 
ment or  deduction  from  the  monthly  circular  rates,  nor  allow  any  agent  or 
middle  interest  to  divide  his  or  their  commissions  or  profits  with  any  manu- 
facturer, dealer  or  consumer,  or  make  any  allowance  or  concession  in  price 
from  the  monthly  rates  for  any  cause  whatever. 

Seventh.  Operators  are  requested  to  report  to  any  member  of  the  com- 
mittee the  names  of  parties  not  strictly  complying  with  the  above  rules  and 
regulations. 

Wm.  H.  Johns  &  Bro.,  Eagle  and  Monitor  Collieries. 

John  Donaldson,  President  Girard  Mammoth  Coal  Co. 

John  Anderson  &  Co.,  Union  Colliery. 

Audenried,  Norton  &  Co.,  Hazel  Dell  and  Continental. 

Owen,  Eckel  &  Colket,  Colket  and  West  End. 

Herman  Hamburger,  President  Bear  Ridge  Coal  Co. 

S.  M.  Heaton  &  Co.,  Cuyler. 

T.  Garretson,  Girard. 

Miller  Hoch  &  Co.,  Stanton. 

Isaac  May  &  Co.,  Burnside. 

Moodie  Gross  &  Co.,  Hammond,  Girardville  and  Morris. 

Heim  &  Goodwill,  Bear  Valley  and  George  Fales. 

Neal  &  M'Creary,  Shenandoah  City. 

Patterson,  Llewellyn  &  Co.,  Big  Mountain. 

Miller,  Graeff  &  Co.,  Lorberry. 

Levi  Miller  &  Co.,  Lincoln. 

Focht,  Whittaker  &  Co.,  East  Mabanoy. 

W.  H.  Whittaker  &  Co.,  Diamond. 

George  W.  Cole,  Tunnel  Ridge. 

Richard  Hecksher  &  Co.,  Kohinoor. 

Wm.  Montelius,  Stuartville. 

St.  Nicholas  Coal  Co.,  per  John  Donaldson,  St.  Nicholas. 

Wiggau  &  Triebels,  Bear  Run. 

Haas,  Brenizer  &  Co.,  Turkey  Run. 

Jeremiah  Taylor  &  Co.,  Big  Mine  Run. 

W.  H.  Lewis,  Superintendent  Wm.  Penn  Colliery. 

Fry,  Shoemaker  &  Co.,  Newkirk. 

B.  B.  Thomas,  President  Thomas  Coal  Co. 

S.  Atkinson  &  Co.,  Delano  Colliery. 

Schall  &  Donahoe,  Kentucky  Colliery. 

D.  S.  Althouse,  for  Hickory  Shaft  and  Hickory  Coal  Co.,  Draper  Collieries. 

The  Philadelphia  and  Reading  C.  &  I.  Co.,  per  Geo.  de  B.  Keim,  V.  P. 

Douty  and  Baumgardner,  Benj.  Franklin. 

H.  Gawthrope,  sales  agent. 

Thomas  Baumgardner  &  Co.,  Reliance.  Colliery. 

Guiterman  &  Gorman,  Greenback  Colliery. 

Thomas  Baumgardner,  President  Enterprise  Coal  Co.,  Enterprise  Colliery. 

Graeber  Kempel  &  Co.,  Locust  Gap  Colliery. 

J.  Claude  White,  Swatara  Collieries. 

Wm.  Brown,  Lambert  Colliery. 

Lloyd,  Glover  &  Co.,  Phoenix  Park,  No.  3. 

Lawrence  Merkel  &  Co.,  Lawrence. 


HOW   THE  COAL  OP  THE  EETAIL  DEALERS 

WAS  WEIGHED  BY  THE  EMPLOYEES  OF 

THE  PHILADELPHIA  AND  READING 

RAILROAD  COMPANY. 


N.  B. — All  these  weights  were  admitted  to  have  been  made  SECRET- 
LY— W  THE  CELLAR. 


Extract  from  the  Testimony: 

William  Cheeseman,  sworn : 

Mr.  Gowen  examining. 

Q.     What  is  your  business  ? 

A.      It  is  that  of  a  public  weigher. 

Q.  Those  certificates  are  the  ones  you  issued  at  the  time  for  that 
weight  ? 

A.     Yes. 

Q.     Were  they  alj  carefully  and  accurately  weighed  ? 

A.     Yes. 

Q.     Did  you  get  all  the  coal  into  the  bags  ? 

A.     Yes. 

Q.     You  are  confident  of  that? 

A.  I  am  satisfied  we  got  all  the  coal  and  in  some  instances  a  little 
dust.  We  could  not  gather  it  all  up  unless  we  got  gravel  stones — yet 
we  gathered  it  very  clean. 

Certificate  of  Weight  of  Stove  Coal. 

Weighed  for  James  Tully. 

Delivered  to  No.  100  Center  street,  Germantown. 

10  bags- 2265  lbs.  gross. 
28    "    tare. 


2237    "    net. 

CHEESEMAN  &  AMES. 


96 

James  C.  Tully,  sworn : 

Q.     [By  Mr.  Gowen.]     What  was  done  with  the  coal  ? 

A.     It  was  delivered  to  my  house. 

Q.     Was  it  weighed  ? 

A.  Yes;  I  will  state  that,  after  it  was  weighed,  two  buckets  full 
of  coal  were  picked  up. 

Q.     [By  Mr.  Lane.]     Those  buckets  full  were  not  weighed  ? 

A.  No ;  I  asked  him  what  the  amount  of  the  weigh  master  would 
be ;  I  thought  there  would  be  some  waste ;  and  he  said  there  would  be 
some  waste  of  course  in  handling  it ;  I  had  orders  not  to  touch  the 
coal ;  I  had  been  out  of  coal  for  a  long  while,  and  so  I  went  down 
cellar  and  picked  up  two  buckets  full  of  coal  after  it  had  been  weighed. 

Q.  [By  Mr.  Gowen.]  Was  not  this  coal  dumped  where  there  had 
been  some  coal  before  ? 

A.     No  ;  my  cellar  had  been  cleaned. 


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